FISCAL YEAR 2021 SUMMARY ANNUAL REPORT ......led by Modelo Especial, which grew double digits to...

F I S C A L Y E A R 2 0 21 S U M M A RY A N N U A L R E P O R T

WORTHREACHINGFOR

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In what was one of the most challenging years in recent memory, our business, our brands, our people, and our communities were tested in ways we could not have predicted.

But best-in-class companies prove to be resilient and adaptable in times of uncertainty. I am extremely proud to say this was certainly the case for our Constellation Brands team in Fiscal 2021.

Our team’s agility, passion, and relentless focus on the consumer—aided by the strength and support of our distributor and retailer partners—allowed us to overcome many headwinds to deliver an exceptional performance. At the onset of the pandemic, we committed to making decisions that prioritized the physical and economic safety, health and well-being of our employees and to continue to manage our business with discipline, ensuring appropriate balance between short-term needs and positioning our company for long-term growth.

As a result, we enter Fiscal 2022 from a position of strength and are well-equipped to execute against our strategic vision to drive sustainable, long-term success for our business and deliver meaningful returns to our shareholders.

During Fiscal 2021, we achieved strong earnings growth and generated record free cash flow, while significantly reducing debt. This strong performance was anchored by our Beer business, which delivered double-digit operating income and net sales growth of 8%, marking the 11th consecutive year of growth for this business and reinforcing our leadership position in the high-end of the U.S. Beer market. We drove exceptional performance across our Beer portfolio, led by Modelo Especial, which grew double digits to surpass 145 million cases sold, making it the only imported beer to ever surpass 10 million barrels in volume.(1) Modelo Especial is now the #3 best-selling beer in the U.S., with ample runway for continued growth in the years ahead. Corona Extra, the #6 best-selling beer in the U.S., continues to be one of the country’s most loved brands. Corona Extra grew IRI dollar sales by 11%, surpassing $2 billion in retail sales last year. And recent brand extensions that align with the emerging consumer betterment trend such as Corona Premier (depletions up nearly 20% in Fiscal 2021) and Corona Hard Seltzer (the most successful new product launch in company history) were major contributors to growth for the Corona Brand Family.

Our Wine & Spirits consumer-led premiumization strategy continued to gain traction during the fiscal year. Our divestiture of a number of lower-end wine brands positions this business for enhanced growth and profitability going forward. Our retained Wine & Spirits portfolio delivered net sales growth for the fiscal year, driven by double-digit

DEAR SHAREHOLDERS

Constellation Brands, Inc. FY 2021 Summary Annual Report #WORTHREACHINGFOR

BEER BUSINESS REINFORCES LEADERSHIP

POSITION

FY21 marked the 11th consecutive year of growth for our beer business, driven by Modelo Especial—now the #3 beer brand in the US—and Corona Extra, the #6 best-selling brand.

WINE & SPIRITS PREMIUMIZATION

STRATEGY GAINS TRACTION

The divestiture of a number of lower- end wine brands positions the business for enhanced growth, with our retained portfolio delivering net sales growth for the fiscal year.

LEVERAGING OUR INFLUENCE AND VOICE

Our teams and brands stepped up to contribute nearly $6 million to support pandemic relief, and established our Focus on Minority Founders program to invest $100 million in Black- and minority-owned businesses by 2030.


volume growth for Meiomi, Kim Crawford, and The Prisoner Wine Company Brand Family. Impactful innovations including Meiomi Cabernet Sauvignon, Kim Crawford Illuminate and The Prisoner Unshackled (which became the #1 high-end new brand in IRI channels for fiscal 2021) also contributed to growth.

Canopy Growth Corporation has made significant progress in strengthening its position in core markets and taking steps to prepare for legalization of cannabis in the U.S. Canopy’s successful rollout of cannabis beverages, as well as other Rec 2.0(2) products, has helped Canopy gain momentum. During the year, Canopy had the top three beverages in the Canadian recreational market,(3) and has recently introduced its popular Quatreau CBD beverages in the U.S. Canopy’s Storz & Bickel, BioSteel, and Martha Stewart-branded products also gained traction throughout the year.(4)

In addition to driving our business forward, our team also stepped up to help industry partners and communities impacted by the pandemic and natural disasters, and to play an active role in combatting social injustice in the U.S.

With the support of our brands, the company has contributed nearly $6 million to assist industry partners and underserved communities impacted by the pandemic. We committed $10 million to the Clear Vision Fund, designed to invest in minority-owned businesses, primarily those operating in underserved Black and Latinx communities. This contribution is part of our broader commitment to invest $100 million over the next 10 years in Black, Latinx, and minority-owned businesses in the beverage alcohol space and adjacent categories. And we’ve taken steps to create forums for discussion, awareness-building, education, and allyship in support of our Asian colleagues in response to the disturbing trend of violence against members of the Asian community in the U.S.

As we look ahead, our goal is to consistently deliver industry-leading total shareholder returns over the long-term. We will accomplish this with a focus on a few key pillars:

• Continue building strong brands people love with advantaged routes to market.

• Build a culture that is consumer-obsessed and leverages robust innovation capabilities to stay on the forefront of consumer trends.

• Deliver on impactful ESG (Environmental, Social, and Governance) initiatives that we believe are not only good business, but also good for the world.

We have daring ambitions for the future. But it is our team’s proven ability to be bold, courageous brand builders dedicated to delivering what’s next that gives me confidence that Constellation will remain a relentless growth story for years to come. I want to thank our employees, partners, and shareholders for your continued confidence and support as we strive to build a company that, in all aspects, is truly Worth Reaching For.

Bill Newlands President & CEO

IRI, Total U.S. Multi-Outlet + Convenience, 52 weeks ending Feb 21, 2021 source for all market data, unless otherwise noted

(1) Beer Marketer’s Insights, Calendar Year 2020

(2) Rec 2.0 refers to Canopy’s portfolio of products made federally legal in Canada as of October 17, 2019 under Canada’s “Cannabis 2.0,” which include cannabis-derivative products, including cannabis-infused beverages, edibles, and concentrates used in vaping

(3) Canopy Growth Corporation Proprietary Market Tracker

(4) Canopy Growth Corporation, Q3 FY21 Earnings Presentation




FISCAL 2021 HIGHLIGHTS

$5B $1.7B $2.8BTO SHAREHOLDERS

Committed to return $5 billion to shareholders by FY23 in the form of dividends and share repurchases.

REDUCTION IN DEBTReduced debt by $1.7 billion

during fi scal 2021.

OPERATING CASH FLOWGenerated record operating cash fl ow of $2.8 billion for fi scal 2021.

Source: BCG and IRi Growth Leaders in CPG 2020

8 CONSECUTIVE YEARSAS A CPG GROWTH LEADER

HIGHEST NUMBER OF CONSECUTIVE YEARS AMONG LARGE CPG COMPANIES

2013

2017

2014

2018

2015

2019

2016

2020


UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

WASHINGTON,D.C.20549

FORM10-K(MarkOne)

☒ ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

ForthefiscalyearendedFebruary28,2021or

☐ TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

Forthetransitionperiodfrom to

Commissionfilenumber001-08495

CONSTELLATIONBRANDS,INC.(Exactnameofregistrantasspecifiedinitscharter)

Delaware 16-0716709

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

207HighPointDrive,Building100,Victor,NewYork14564

(Addressofprincipalexecutiveoffices)(Zipcode)

Registrant’stelephonenumber,includingareacode(585)678-7100

SecuritiesregisteredpursuanttoSection12(b)oftheAct:

TitleofEachClass TradingSymbol(s) NameofEachExchangeonWhichRegistered

ClassACommonStock STZ NewYorkStockExchange

ClassBCommonStock STZ.B NewYorkStockExchange

SecuritiesregisteredpursuanttoSection12(g)oftheAct:None

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

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

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

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

Emerginggrowthcompany ☐Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodfor

complyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.☐Indicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsmanagement’sassessmentofthe

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

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

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Theaggregatemarketvalueofthevotingandnon-votingcommonequityheldbynon-affiliatesoftheregistrant,basedupontheclosingsalespricesoftheregistrant’sClassAandClassBCommonStockasreportedontheNewYorkStockExchangeasofthelastbusinessdayoftheregistrant’smostrecentlycompletedsecondfiscalquarterwas$29,984,320,148.

ThenumberofsharesoutstandingwithrespecttoeachoftheclassesofcommonstockofConstellationBrands,Inc.,asofApril14,2021,issetforthbelow:

Class NumberofSharesOutstanding

ClassACommonStock,parvalue$.01pershare 170,152,810

ClassBCommonStock,parvalue$.01pershare 23,261,188

Class1CommonStock,parvalue$.01pershare 613,717

DOCUMENTSINCORPORATEDBYREFERENCE

TheProxyStatementofConstellationBrands,Inc.tobeissuedfortheAnnualMeetingofStockholderswhichisexpectedtobeheldJuly20,2021isincorporatedbyreferenceinPartIIItotheextentdescribedtherein.

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TABLEOFCONTENTSPage

FORWARD-LOOKINGSTATEMENTS i

DEFINEDTERMS iii

PARTI

Item1. Business 1

Item1A. RiskFactors 15

Item1B. UnresolvedStaffComments NA

Item2. Properties 28

Item3. LegalProceedings 28

Item4. MineSafetyDisclosures NA

PARTII

Item5. MarketforRegistrant’sCommonEquity,RelatedStockholderMatters,andIssuerPurchasesofEquitySecurities

29

Item6. SelectedFinancialData NA

Item7. Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations 30

Item7A. QuantitativeandQualitativeDisclosuresAboutMarketRisk 52

Item8. FinancialStatementsandSupplementaryData 54

Item9. ChangesinandDisagreementsWithAccountantsonAccountingandFinancialDisclosure NA

Item9A. ControlsandProcedures 115

Item9B. OtherInformation NA

PARTIII

Item10. Directors,ExecutiveOfficers,andCorporateGovernance 116

Item11. ExecutiveCompensation 116

Item12. SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters

116

Item13. CertainRelationshipsandRelatedTransactions,andDirectorIndependence 117

Item14. PrincipalAccountingFeesandServices 117

PARTIV

Item15. Exhibits,FinancialStatementSchedules 118Item16. Form10-KSummary 118

SIGNATURES 126

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ThisAnnualReportonForm10-Kcontains“forward-lookingstatements”withinthemeaningofSection27AoftheSecuritiesActof1933andSection21EoftheSecuritiesExchangeActof1934.Theseforward-lookingstatementsaresubjecttoanumberofrisksanduncertainties,manyofwhicharebeyondourcontrol,whichcouldcauseactualresultstodiffermateriallyfromthosesetforthin,orimpliedby,suchforward-lookingstatements.AllstatementsotherthanstatementsofhistoricalfactincludedinthisAnnualReportonForm10-Kareforward-lookingstatements,includingwithoutlimitation:

• ThestatementsregardingthecurrentglobalCOVID-19pandemic.• Thestatementsregardingthepotentialimpacttosupply,productionlevels,andcostsduetowildfires.• ThestatementsunderItem1.“Business”andItem7.“Management’sDiscussionandAnalysisof

FinancialConditionandResultsofOperations”regarding:◦ ourbusinessstrategy,futureoperations,futurefinancialposition,futurenetsalesandexpected

volumetrends,futuremarketingspend,expectedeffectivetaxratesandanticipatedtaxliabilities,prospects,plans,andobjectivesofmanagement;

◦ informationconcerningexpectedorpotentialactionsofthirdparties,includingpotentialchangestointernationaltradeagreements,tariffs,taxes,andothergovernmentalrulesandregulations;

◦ informationconcerningthefutureexpectedbalanceofsupplyanddemandforourproducts;◦ timingandsourceoffundsforoperatingactivitiesandNovember2018Canopywarrantexercises,

ifany;◦ themanner,timing,anddurationofthesharerepurchaseprogramandsourceoffundsforshare

repurchases;and◦ theamountandtimingoffuturedividends.

• Thestatementsregardingourbeerexpansion,construction,andoptimizationactivities,includinganticipatedcostsandtimeframesforcompletion,discussionswithgovernmentofficialsinMexico,andexpectedimpairmentofnon-recoverablebreweryconstructionassets.

• Thestatementsregarding:◦ thevolatilityofthefairvalueofourinvestmentinCanopymeasuredatfairvalue;◦ ouractivitiessurroundingourinvestmentinCanopy;◦ ourtargetedleverageratio;◦ theNovember2018CanopyWarrants;and◦ ourfutureownershiplevelinCanopyandourfutureshareofCanopy’sreportedearningsand

losses.• ThestatementsregardingtheWineandSpiritsDivestitures,includingpotentialamountofcontingent

consideration,amountanduseofproceeds,andanyfuturerestructuringcharge.• ThestatementsregardingCanopy’sexpectationsandthetransactionwithAcreage.

WhenusedinthisAnnualReportonForm10-K,thewords“anticipate,”“intend,”“expect,”andsimilarexpressionsareintendedtoidentifyforward-lookingstatements,althoughnotallforward-lookingstatementscontainsuchidentifyingwords.Allforward-lookingstatementsspeakonlyasofthedateofthisAnnualReportonForm10-K.Weundertakenoobligationtoupdateorreviseanyforward-lookingstatements,whetherasaresultofnewinformation,futureevents,orotherwise.Althoughwebelievethattheexpectationsreflectedintheforward-lookingstatementsarereasonable,wecangivenoassurancethatsuchexpectationswillprovetobecorrect.Inadditiontotherisksanduncertaintiesofordinarybusinessoperationsandconditionsinthegeneraleconomyandmarketsinwhichwecompete,ourforward-lookingstatementscontainedinthisAnnualReportonForm10-Karealsosubjecttotheriskanduncertaintythat:

• thedurationandimpactoftheCOVID-19pandemic,includingbutnotlimitedtotheefficacyofthevaccinerollout,theclosureofnon-essentialbusinesses,whichmayincludeourmanufacturingfacilities,andotherassociatedgovernmentalcontainmentactions,mayvaryfromourcurrentexpectations,andtheincreaseincyber-securityattacksthathaveoccurredwhilenon-productionemployeesworkremotely;

• theactualimpacttosupply,productionlevels,andcostsduetowildfiresmayvaryfromourcurrentexpectationsdueto,amongotherreasons,theactualseverityandgeographicalreachofwildfires;

ConstellationBrands,Inc.FY2021Form10-K #WORTHREACHINGFORIi

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• theactualbalanceofsupplyanddemandforourproductsandpercentageofourportfoliodistributedthroughanyparticulardistributorwillvaryfromcurrentexpectationsdueto,amongotherreasons,actualrawmaterialsupply,actualshipmentstodistributors,andactualconsumerdemand;

• theactualdemand,netsales,andvolumetrendsforourproductswillvaryfromcurrentexpectationsdueto,amongotherreasons,actualshipmentstodistributors,andactualconsumerdemand;

• theamount,timing,andsourceoffundsforanysharerepurchasesorCanopywarrantexercises,ifany,mayvaryduetomarketconditions;ourcashanddebtposition;theimpactofthebeeroperationsexpansionactivities;theimpactofourinvestmentinCanopy;anyfutureexerciseoftheNovember2018CanopyWarrants;theexpectedimpactsoftheWineandSpiritsDivestitures;andotherfactorsasdeterminedbymanagementfromtimetotime;

• theamountandtimingoffuturedividendsmaydifferfromourcurrentexpectationsifourabilitytousecashflowtofunddividendsisaffectedbyunanticipatedincreasesintotalnetdebt,weareunabletogeneratecashflowatanticipatedlevels,orwefailtogenerateexpectedearnings;

• thefairvalueofourinvestmentinCanopymayvaryduetomarketandeconomicconditionsinCanopy’smarketsandbusinesslocations;

• theaccuracyofmanagement’sprojectionsrelatingtotheCanopyinvestmentmayvaryfrommanagement’scurrentexpectationsduetoCanopy’sactualresultsofoperationsandmarketandeconomicconditions;

• thetimeframeandactualcostsassociatedwiththebeeroperationsexpansionactivitiesandamountofimpairmentfornon-recoverablebreweryexpansionassetsinMexicomayvaryfrommanagement’scurrentexpectationsduetomarketconditions,ourcashanddebtposition,receiptofrequiredregulatoryapprovalsbytheexpecteddatesandontheexpectedterms,resultsofdiscussionswithgovernmentofficialsinMexico,actualamountofnon-recoverablebreweryexpansionassets,andotherfactorsasdeterminedbymanagement;

• theactualrestructuringcharge,ifany,associatedwiththeWineandSpiritsDivestitureswillvarybasedonmanagement’sfinalplans;

• theamountofcontingentconsiderationifany,receivedintheWineandSpiritsDivestitureswilldependonactualfuturebrandperformance;

• anyimpactofU.S.federallawsonthetransactionbetweenAcreageandCanopyorupontheimplementationofthattransactionortheimpactoftheAcreageTransactionuponourfutureownershiplevelinCanopyorourfutureshareofCanopy’sreportedearningsandlosses,mayvaryfrommanagement’scurrentexpectations;and

• ourtargetedleverageratiomayvaryfrommanagement’scurrentexpectationsduetomarketconditions,ourabilitytogeneratecashflowatexpectedlevels,andourabilitytogenerateexpectedearnings.

Additionalimportantfactorsthatcouldcauseactualresultstodiffermateriallyfromthosesetforthinorimpliedbyourforward-lookingstatementscontainedinthisAnnualReportonForm10-KarethosedescribedinItem1A“RiskFactors”andelsewhereinthisreportandinourotherfilingswiththeSecuritiesandExchangeCommission.

MarketpositionsandindustrydatadiscussedinthisAnnualReportonForm10-Kareasofcalendar2020andhavebeenobtainedorderivedfromindustryandgovernmentpublicationsandourestimates.Theindustryandgovernmentpublicationsinclude:BeerMarketersInsights;BeverageInformationGroup;GrowersNetwork;ImpactDatabankReviewandForecast;InternationalWineandSpiritsResearch(IWSR);IRI;BeerInstitute;andNationalAlcoholBeverageControlAssociation.Wehavenotindependentlyverifiedthedatafromtheindustryandgovernmentpublications.Unlessotherwisenoted,allreferencestomarketpositionsarebasedonequivalentunitvolume.

ConstellationBrands,Inc.FY2021Form10-K #WORTHREACHINGFORIii

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DefinedTerms

Unlessthecontextotherwiserequires,theterms“Company,”“CBI,”“we,”“our,”or“us”refertoConstellationBrands,Inc.anditssubsidiaries.WeusetermsinthisAnnualReportonForm10-KandinourNotestheConsolidatedFinancialStatementsthatarespecifictousorareabbreviationsthatmaynotbecommonlyknownorused.

$ U.S.dollars

2018Authorization authoritytorepurchaseupto$3.0billionofourClassACommonStockandClassBConvertibleCommonStock,authorizedinJanuary2018byourBoardofDirectors

2018CreditAgreement eighthamendedandrestatedcreditagreement,datedasofSeptember14,2018,nowsupersededbythe2020CreditAgreement

2018RestatementAgreement restatementagreement,datedasofSeptember14,2018,thatamendedandrestatedtheAugust2018CreditAgreement

2019Five-YearTermFacility a$491.3million,five-yeartermloanfacilityundertheMarch2020TermCreditAgreement,originallyenteredintoinJune2019

2019TermCreditAgreement atermloancreditagreement,datedasofJune28,2019,thatprovidedforaggregatefacilitiesof$491.3million,consistingofthe2019Five-YearTermFacility

2020CreditAgreement ninthamendedandrestatedcreditagreement,datedasofMarch26,2020,providesforanaggregaterevolvingcreditfacilityof$2.0billion

2020RestatementAgreement restatementagreement,datedasofMarch26,2020,thatamendedandrestatedthe2018CreditAgreement

2020TermCreditAgreement amendedandrestatedTermCreditAgreement,datedasofMarch26,2020

2020TermLoanRestatementAgreement restatementagreement,datedMarch26,2020,thatamendedandrestatedthe2019TermCreditAgreement,resultingintheMarch2020TermCreditAgreement

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

2021Authorization authoritytorepurchaseupto$2.0billionofourClassACommonStockandClassBConvertibleCommonStock,authorizedinJanuary2021byourBoardofDirectors

ABA alternativebeveragealcohol

AccoladeWineInvestment ourremaininginterestinourpreviously-ownedAustralianandEuropeanbusiness

Acreage AcreageHoldings,Inc.

AcreageFinancialInstrument acalloptionforCanopyGrowthCorporationtoacquire100%ofthesharesofAcreageHoldingsInc.,supersededbytheNewAcreageFinancialInstrument

AcreageTransaction CanopyGrowthCorporation’sintentiontoacquireAcreageHoldings,Inc.uponU.S.federalcannabislegalization,subjecttocertainconditions

AdministrativeAgent BankofAmerica,N.A.,asadministrativeagentforapplicableseniorcreditfacilitiesandtermcreditagreements

AFS available-for-sale

AOCI accumulatedothercomprehensiveincome(loss)

August2018CreditAgreement seventhamendedandrestatedcreditagreement,datedasofAugust10,2018,nowsupersededbythe2018CreditAgreementandthe2020CreditAgreement

August2018RestatementAgreement restatementagreement,datedasofAugust10,2018,thatamendedandrestatedoursixthamendedandrestatedcreditagreement,datedasofJuly14,2017,whichwasourthen-existingseniorcreditfacility

BallastPointDivestiture saleofBallastPointcraftbeerbusiness,includinganumberofitsassociatedproductionfacilitiesandbrewpubs

Term Meaning

ConstellationBrands,Inc.FY2021Form10-K #WORTHREACHINGFORIiii

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BlackVelvetDivestiture saleofBlackVelvetCanadianWhiskybusinessandthebrand’sassociatedproductionfacility,alongwithasubsetofCanadianwhiskybrandsproducedatthatfacility,andrelatedinventory

BookerVineyard MyFavoriteNeighbor,LLC,alsoknownasBookerVineyard,asuper-luxury,direct-to-consumerfocusedwinebusiness,wemadeaninvestmentinMyFavoriteNeighbor,LLC

BRGs businessresourcegroups

C$ Canadiandollars

Canopy CanopyGrowthCorporation

CanopyDebtSecurities convertibledebtsecuritiesissuedbyCanopyGrowthCorporation

CanopyEquityMethodInvestment November2017CanopyInvestment,November2018CanopyInvestment,andMay2020CanopyInvestment,collectively

CARESAct CoronavirusAid,Relief,andEconomicSecurityAct

CBInternational CBInternationalFinanceS.àr.l.,awholly-ownedsubsidiaryofours

CDC CentersforDiseaseControl

CIH CIHInternationalS.àr.l.,awholly-ownedsubsidiaryofours

CODM chiefoperatingdecisionmaker

ComparableAdjustments certainitemsaffectingcomparabilitythathavebeenexcludedbymanagement

ConcentrateBusinessDivestiture saleofcertainbrandsusedinourconcentratesandhigh-colorconcentratebusiness,andcertainintellectualproperty,inventory,goodwill,interestsincertaincontracts,andassetsofourconcentratesandhigh-colorconcentratebusiness

Copper&Kings Copper&KingsAmericanBrandyCompany,acquiredbyus

CPG consumerpackagedgoods

Crown CrownImportsLLC,awholly-ownedsubsidiaryofours

CSR corporatesocialresponsibility

DE&I diversity,equity,andinclusion

Gallo E.&J.GalloWinery

EHS Environmental,Health,&Safety

EmpathyWines EmpathyWinesbusiness,includingadigitally-nativewinebrand,acquiredbyus

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

ERP enterpriseresourceplanningsystem

ESG environmental,social,andgovernance

FASB FinancialAccountingStandardsBoard

Fiscal2019 theCompany’sfiscalyearendedFebruary28,2019



Fiscal2022 theCompany’sfiscalyearendingFebruary28,2022




Five-YearTermFacility a$1.0billionfive-yeartermloanfacility,nowunderthe2020TermCreditAgreement

Form10-K thisAnnualReportonForm10-KforthefiscalyearendedFebruary28,2021unlessotherwisespecified

FourCorners FourCornersBrewingCompanyLLC

GILTI globalintangiblelow-taxedincome

Term Meaning

ConstellationBrands,Inc.FY2021Form10-K #WORTHREACHINGFORIiv

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IncrementalFacilities oneormoretranchesofadditionaltermloansunderourseniorcreditfacility

June2019WarrantModification June2019modificationofthetermsofthewarrantsandcertainotherrightsoriginallyobtainedinNovember2018whichgaveustheoptiontopurchase139.7millioncommonsharesofCanopyGrowthCorporation

June2019WarrantModificationLoss ourshareofCanopyGrowthCorporation’sadditionallossresultingfromtheJune2019WarrantModification

Lender BankofAmerica,N.A.,aslenderforeachapplicabletermcreditagreement

LIBOR LondonInterbankOfferedRate

Long-TermStockIncentivePlan astockholder-approvedomnibusincentiveplanthatprovidestheabilitytograntvarioustypesofequityandcashawardstoeligibleplanparticipants

March2020TermCreditAgreement amendedandrestated2019TermCreditAgreement,datedasofMarch26,2020

May2020CanopyInvestment May2020exerciseoftheNovember2017CanopyWarrantsatanexercisepriceofC$12.98perwarrantshare

MD&A Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperationsunderItem7.ofthisAnnualReportonForm10-K

MexicaliBrewery brewerylocatedinMexicali,BajaCalifornia,Mexico

MexicoBeerProjects expansionactivitiesattheObregonBreweryandNavaBrewery

MissionBell MissionBellWineryinMadera,California

NA notapplicable

Nasdaq TheNasdaqGlobalSelectMarket

NavaBrewery brewerylocatedinNava,Coahuila,Mexico

Nelson’sGreenBrier Nelson’sGreenBrierDistillery,LLC,acquiredbyus

Netsales grosssaleslesspromotions,returnsandallowances,andexcisetaxes

NewAcreageAgreement modificationoftheAcreageTransactionandrelatedAcreageFinancialInstrument

NewAcreageFinancialInstrument acalloptionforCanopyGrowthCorporationtoacquire70%ofthesharesofAcreageHoldingsInc.atafixedexchangeratioand30%atafloatingexchangeratio

NM notmeaningful

NobiloWineDivestiture saleofNewZealand-basedNobiloWinebrandandcertainrelatedassets

Note(s) NotestotheConsolidatedFinancialStatementsunderItem8ofthisAnnualReportonForm10-K

November2017CanopyInvestment ourinitialinvestmentfor18.9millioncommonsharesofCanopyGrowthCorporation

November2017CanopyWarrants warrantswhichgaveustheoptiontopurchase18.9millioncommonsharesofCanopyGrowthCorporation,exercisedMay1,2020

November2018CanopyInvestment ourincrementalinvestmentfor104.5millioncommonsharesofCanopyGrowthCorporation

November2018CanopyTransaction November2018CanopyInvestmentandthepurchasebyusoftheNovember2018CanopyWarrants,collectively

November2018CanopyWarrants TrancheAWarrants,TrancheBWarrants,andTrancheCWarrants,collectively

NPD newproductdevelopment

NYSE NewYorkStockExchange®

ObregonBrewery brewerylocatedinObregon,Sonora,Mexico

OCI othercomprehensiveincome(loss)

Owens-Illinois thecompanywithwhichwehaveanequally-ownedjointventuretooperateaglassplantinNava,Coahuila,Mexico

PaulMassonDivestiture saleofPaulMassonGrandeAmberBrandybrand,relatedinventory,andinterestsincertaincontracts

Term Meaning

ConstellationBrands,Inc.FY2021Form10-K #WORTHREACHINGFORIv

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PET polyethyleneterephthalate

RIVCapital RIVCapitalInc.(formerlyCanopyRiversInc.)

RIVCapitalDivestiture CanopyGrowthCorporationsolditsownershipinterestinRIVCapital

SEC SecuritiesandExchangeCommission

SKU stock-keepingunit,isascannablebarcode,mostoftenseenprintedonproductlabelsinaretailstore

SOFR securedovernightfinancingrateadministeredbytheFederalReserveBankofNewYork

SOX Section404oftheSarbanes-OxleyActof2002

TCJAct TaxCutsandJobsAct

TermCreditAgreement atermloancreditagreement,datedasofSeptember14,2018,thatprovidedforaggregatefacilitiesof$1.5billion,consistingoftheThree-YearTermFacilityandtheFive-YearTermFacility,nowsupersededbythe2020TermCreditAgreement

TermLoanRestatementAgreement restatementagreement,datedasofMarch26,2020,thatamendedandrestatedtheTermCreditAgreement,resultinginthe2020TermCreditAgreement

Three-YearTermFacility a$500.0millionfive-yeartermloanfacility,nowunderthe2020TermCreditAgreement

TrancheAWarrants warrantswhichgaveustheoptiontopurchase88.5millioncommonsharesofCanopyGrowthCorporationexpiringNovember1,2023

TrancheBWarrants warrantswhichgaveustheoptiontopurchase38.4millioncommonsharesofCanopyGrowthCorporationexpiringNovember1,2026

TrancheCWarrants warrantswhichgaveustheoptiontopurchase12.8millioncommonsharesofCanopyGrowthCorporationexpiringNovember1,2026

TSX TorontoStockExchange

U.S. UnitedStatesofAmerica

VWAPExercisePrice volume-weightedaverageoftheclosingmarketpriceofCanopy’scommonsharesontheTorontoStockExchangeforthefivetradingdaysimmediatelyprecedingtheexercisedate

WHO WorldHealthOrganization

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

WineandSpiritsDivestitures WineandSpiritsDivestitureandtheNobiloWineDivestiture,collectively

Term Meaning

ConstellationBrands,Inc.FY2021Form10-K #WORTHREACHINGFORIvi

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Item1.Business

Introduction

Weareaninternationalproducerandmarketerofbeer,wine,andspiritswithoperationsintheU.S.,Mexico,NewZealand,andItalywithpowerful,consumer-connected,high-qualitybrandslikeCoronaExtra,ModeloEspecial,RobertMondavi,KimCrawford,Meiomi,andSVEDKAVodka.IntheU.S.,weareoneofthetopgrowthcontributorsatretailamongbeveragealcoholsuppliers.Wearethethird-largestbeercompanyandaleaderinthehigh-endoftheU.S.beermarketandahigher-endwineandspiritscompanywithmanyofourproductsasleadersintheirrespectivecategories.Ourstrongmarketpositionsmakeusasupplierofchoicetomanyofourconsumersandourcustomers,whoincludewholesaledistributors,retailers,andon-premiselocations.Weconductourbusinessthroughentitieswewhollyownaswellasthroughavarietyofjointventuresandotherentities.

Ourmissionistobuildbrandsthatpeoplelove.Weareinthebusinessofcreatingnewexperiencesthatbringpeopletogetherandelevatetheirlives.It’sworthourdedication,hardwork,andtheboldcalculatedriskswetaketodelivermoreforouremployees,consumers,tradepartners,shareholders,andcommunitiesinwhichweliveandwork.It’swhathasmadeusoneofthefastest-growinglargeCPGcompaniesintheU.S.atretail,anditdrivesourpursuittodeliverwhat’snext.Ourkeyvaluesare:

People–Truestrengthisachievedwheneveryonehasavoice.Thatiswhywebuildourcultureonafoundationthatencouragesinclusionanddiversityofthought,whereeveryonefeelsempoweredtobringtheirtrueselvesanddifferentpointsofviewstodriveusforward;Customers–Wearerelentlesstoanticipatewhatconsumerswanttoday,tomorrow,andwellintothefuture;Entrepreneurship–Asanindustryleader,weactwithaboldcalculatedapproachtorealizeourvisionandunlocknewgrowthopportunities;Quality–Ourpromiseistopursuequalityinourprocessandproductsbycontinuouslyenhancingwhatwedoandhowwedoit;andIntegrity–Itisaboutmorethanachievinggoals.Howweachievethemisjustasimportant.Weactwithhighmoralandethicalstandardsandalwaysdotherightthing,evenwhenitisthehardthing.

HeadquarteredinVictor,NewYork,weareaDelawarecorporationincorporatedin1972,asthesuccessortoabusinessfoundedin1945.

Strategy

Ouroverallstrategyistodrivegrowthandshapethefutureofourindustrybybuildingbrandsthatpeopleloveanddeliveringunrivaledvaluetoourshareholders.Weendeavortopositionourportfoliotobenefitfromtheconsumer-ledpremiumizationtrend,whichwebelievewillcontinuetodrivefastergrowthratesinthehigher-endofthebeer,wine,andspiritscategories.

Tocapitalizeonconsumer-ledpremiumizationtrends,becomemorecompetitive,andgrowourbusiness,wehaveemployedastrategydedicatedtoacombinationoforganicgrowthandacquisitions,withafocusonthehigher-margin,higher-growthcategoriesofthebeveragealcoholindustry.Keyelementsofourstrategyinclude:

• leverageourleadingpositionintotalbeveragealcoholandscalewithwholesalersandretailerstoexpanddistributionofourproductportfolio;

• strengthenrelationshipswithwholesalersandretailersbyprovidingconsumerandbeveragealcoholinsights;

• investinbrandbuildingandinnovationactivities;• positionourselvesforsuccesswithconsumer-ledproductsthatidentify,meet,andstayaheadof

evolvingconsumertrendsandmarketdynamics;• realizeoperatingefficienciesbyexpandingandenhancingproductioncapabilitiesandmaximizing

assetutilization;and

PARTI ITEM1.BUSINESS

ConstellationBrands,Inc.FY2021Form10-K #WORTHREACHINGFORI1

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• developemployeestoenhanceperformanceinthemarketplace.

Wehaveremainedcommittedtoexecutingthisstrategy,andasaresulthaverealizeditsimpactoneachsegmentofourbusiness.

Inourbeerbusiness,wehavesolidifiedourpositioninthehigh-endoftheU.S.beermarket;enhancedourmargins,resultsofoperations,andoperatingcashflow;andprovidednewavenuesforgrowth.Wemadecapitalinvestmentstoincreasebeerproductioncapacitytosupportthegrowthofthebusiness.Wecontinuetofocusonconsumer-ledinnovationbycreatingnewproductsthatmeetemergingneeds.

Inourwineandspiritsbusiness,wecontinuetofocusonhigher-endbrands,improvemargins,andcreateoperatingefficiencies.Wecontinuetodriveourstrategybyacquiringhigher-margin,higher-growthwineandspiritsbrands,includingtheadditionofMeiomiandPrisonertotheportfoliowerefinedoverthepastseveralyears.Wehavestrategicallyoptimizedthevalueofthisbusinessthroughtherecentdivestituresofaportionofourwineandspiritsbusiness,whichincludedlower-margin,lower-growthbrands,wineries,vineyards,offices,andfacilities.Higher-endspiritsbrandswereaddedtoourspiritsportfoliothroughtheacquisitionsofCasaNobletequila,andHighWestcraftwhiskeys,andwerecentlyintroducedSVEDKAandHighWestpre-mixedcocktailstocapitalizeonthegrowthintheready-to-drinkspace.Inaddition,wehavestrengthenedourpositionintheacceleratingdirect-to-consumerand3-tiereCommercechannelwiththeacquisitionofEmpathyWinesandinvestmentinBookerVineyard.

WecomplementourstrategywithourinvestmentinCanopybyexpandingourportfoliointoadjacentcategories.Canopyisaleadingcannabiscompanywithoperationsincountriesacrosstheworld.Thisinvestmentisconsistentwithourlong-termstrategytoidentify,address,andstayaheadofevolvingconsumertrendsandmarketdynamics.WeexpandedourstrategicrelationshipwithCanopytohelppositionitasagloballeaderincannabisproduction,branding,intellectualproperty,andretailing.

Forfurtherinformationonourstrategy,seeMD&A.

Investments,acquisitions,anddivestitures

Inconnectionwithexecutingourstrategyasoutlinedabove,duringFiscal2021wecompletedthefollowingtransactions:

Beersegment

BallastPointDivestiture March2020

DivestitureoftheBallastPointcraftbeerbusiness,includinganumberofitsproductionfacilitiesandbrewpubs;consistentwithourstrategicfocusonourhigh-performingimportportfolio.

WineandSpiritssegment

PaulMassonDivestiture January2021

DivestitureofPaulMassonGrandeAmberBrandybrandandrelatedinventory;consistentwithourincreasedfocusonconsumer-ledpremiumizationtrends.

WineandSpiritsDivestitures January2021

Divestitureoflower-margin,lower-growthwineandspiritsbrands,wineries,vineyards,offices,andfacilities;consistentwithourfocusonconsumer-ledpremiumizationtrends.

ConcentrateBusinessDivestiture

December2020

Divestitureofcertainbrandsusedinourconcentratesandhigh-colorconcentratesbusiness;consistentwithourfocusonconsumer-ledpremiumizationtrends.

Copper&Kings September2020

Acquisitionofacollectionoftraditionalandcraft-batchdistilledAmericanbrandiesandotherselectspirits;supportedourstrategicfocustobuildanindustry-leadingportfolioofhigher-endspiritsbrands.

Date StrategicContribution



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EmpathyWines June2020

Acquisitionofadigitally-nativewinebrand,strengthenedourpositioninthedirect-to-consumerandeCommercemarkets;supportedourfocusonmeetingtheevolvingneedsofourconsumers.

BookerVineyard April2020

Investmentinsuper-luxury,direct-to-consumerfocusedwinebusiness;supportedourfocusonconsumer-ledpremiumizationtrendsandmeetingtheevolvingneedsofourconsumers.

Canopysegment

May2020CanopyInvestment

May2020

IncrementalinvestmentinCanopy;expandedourstrategicrelationship.

Date StrategicContribution

ForfurtherinformationaboutoursignificantFiscal2021,Fiscal2020,andFiscal2019transactions,referto(i)MD&Aand(ii)Notes2and10.

Businesssegments

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

FortheYearsEnded

February28,2021

February29,2020

(inmillions)

Beer $ 6,074.6 $ 5,615.9

WineandSpirits:

Wine 2,208.4 2,367.5

Spirits 331.9 360.1

TotalWineandSpirits 2,540.3 2,727.6

Canopy 378.6 290.2

ConsolidationandEliminations (378.6) (290.2)

ConsolidatedNetSales $ 8,614.9 $ 8,343.5

Fiscal2021ConsolidatedNetSales

Beer:70.5%

Wine:25.6%

Spirits:3.9%

Fiscal2020ConsolidatedNetSales

Beer:67.3%

Wine:28.4%

Spirits:4.3%



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BeersegmentWearethe#1brewerandsellerofimportedbeerintheU.S.market.Wearealsotheleaderinthehigh-

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

CoronaBrandFamily ModeloBrandFamily OtherImportBrands

CoronaExtra CoronaLight ModeloEspecial Pacifico

CoronaPremier CoronaRefresca ModeloNegra Victoria

CoronaFamiliar CoronaHardSeltzer ModeloChelada

IntheU.S.,wearetheleadingimportedbeercompanyandhavenineofthe15top-sellingimportedbeerbrands.ModeloEspecialisthebest-sellingimportedbeer,thirdbest-sellingbeeroverall,andthefastest-growingmajorimportedbeerbrandintheU.S.CoronaExtraisthesecondlargestimportedbeerandsixthbest-sellingbeeroverallintheU.S.

InthepasteightyearswehavemorethantripledourproductioncapacityinMexicoallowingustheopportunitytofurtherexpandourleadershippositioninthehigh-endsegmentoftheU.S.beermarket.InFiscal2021,westrengthenedourcompetitivepositioninthefast-growinghardseltzercategory,broadenedourdistributionreach,andenhancedourmarketshareinthehigh-end.AfteroursuccessfullaunchofCoronaRefrescainFiscal2020,welaunchedCoronaHardSeltzerinearlyFiscal2021.WithonlyoneSKU,CoronaHardSeltzerreachedthe#4best-sellingseltzerbrandfamily,andallowedustocapitalizeontherobustgrowthofthehigh-endABAcategory.InearlyFiscal2022,weexpandedintonewflavorsandintroducedasecondCoronaHardSeltzervarietypackandexpecttolaunchCoronaHardSeltzerLimonadainJuneoffiscal2022.Additionally,wearecontinuingeffortsfocusedonincreasingsalesdistributionofproductsincan,draft,single-serve,andlargerpackagesizeformats.

ExpansioneffortscontinueunderourMexicoBeerProjects.Sincethe2013acquisitionoftheimportedbeerbusiness,wehaveinvestednearly$5billionintheMexicoBeerProjects,withapproximately$700millionduringFiscal2021.InearlyFiscal2022,wecompletedpartofaplannedexpansionprojectattheObregonBrewery,increasingourproductioncapacitytoapproximately39millionhectolitersandcontributingtoourmedium-termcapacityneeds.



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WineandSpiritssegmentWearealeading,higher-endwineandspiritscompanyintheU.S.market,withaportfoliothatincludes

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

IntheU.S.,wehaveeightofthe100top-sellinghigh-endwinebrands,withMeiomiandKimCrawfordachievingthe#4and#7spot,respectively.Someofourwell-knownwineandspiritsbrandsandportfolioofbrandsinclude:

WineBrands WinePortfolioofBrands SpiritsBrands

7Moons Meiomi CharlesSmith CasaNoble

Cook’sCaliforniaChampagne MountVeeder Prisoner HighWest

Cooper&Thief Ruffino RobertMondavi MiCAMPO

CraftersUnion SIMI Schrader Nelson’sGreenBrier

KimCrawford TheDreamingTree SVEDKA

Wehavebeenincreasingourinvestmentinsupportofon-trendproductinnovationaswebelievethisisoneofthekeydriversofoverallbeveragealcoholcategorygrowth.Wehavelaunchedvarietallineextensionsbehindmanyofourbrands,suchasThePrisonercabernetsauvignonandchardonnayvarietals,Woodbridgespiritsbarrelagedvarietals,Meiomicabernetsauvignon,andSVEDKAandHighWestpre-mixedcocktailsintheready-to-drinkspace.

CorporateOperationsandOthersegmentTheCorporateOperationsandOthersegmentincludestraditionalcorporate-relateditemsincludingcosts

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

CanopysegmentTheCanopyEquityMethodInvestmentmakesuptheCanopysegment.

Forfurtherinformationregardingnetsalesandoperatingincome(loss)ofourbusinesssegmentsandgeographicareasseeNote22.

Marketinganddistribution

Tofocusontheirrespectiveproductcategories,buildbrandequity,andincreasesales,oursegmentsemployfull-time,in-housemarketing,sales,andcustomerservicefunctions.Thesefunctionsengageinarangeof



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marketingactivitiesandstrategies,includingmarketresearch,consumerandtradeadvertising,pricepromotions,point-of-salematerials,eventsponsorship,on-premisepromotions,andpublicrelations.Whereopportunitiesexist,particularlywithnationalaccountsintheU.S.,weleverageoursalesandmarketingskillsacrosstheorganization.

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

EffectiveApril1,2021,approximately70%ofourbrandedwineandspiritsportfoliovolumeintheU.S.isexpectedtobedistributedthroughanexpandedrelationshipwithasingledistributor.

Trademarksanddistributionagreements

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

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

Competition

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

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

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

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

Canopyoperatesintherecreationalandmedicinalcannabismarketsand,intheirlargestmarket,theycompetewithnumerouslicensedproducersanddistributorsofcannabisproducts.Intherecreationalmarket,Canopycompetesonthebasisofquality,price,brandrecognition,consistencyandvarietyofcannabisproductswhereasthesesamecompetitivefactorsapplyinthemedicalmarketaswellasphysicianfamiliarity.

Production

AsofFebruary28,2021,ourproductioncapacityatourMexicanbrewerieswasapproximately34millionhectoliters.BytheendofFiscal2025,weexpecttocompleteplannedexpansionstoincreaseourcapacityinMexicotoapproximately54millionhectoliterstosupportthegrowthofourMexicanbrands,includingABAs.Duringthistime,wewillalsoexploreoptionstobuildanadditionalplantatanotherlocationinSoutheasternMexicowherethereisampleaccesstowaterandaskilledworkforcetomeetourlong-termneeds.

WearecontinuingtoworkwithgovernmentofficialsinMexicotodeterminenextstepsforoursuspendedMexicaliBreweryconstructionproject.Forfurtherinformationontheseexpansionandconstructionefforts,referto(i)MD&Aand(ii)Notes5and23.



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OurDalevillefacility,locatedinRoanoke,Virginia,supportsourcraftandspecialtybusinessinadditiontoourdomesticinnovationinitiatives.

IntheU.S.,weoperate11wineriesusingmanyvarietiesofgrapesgrownprincipallyintheNapa,Sonoma,Monterey,andSanJoaquinregionsofCalifornia.WealsooperatetwowineriesinNewZealandandsixwineriesinItaly.GrapesarecrushedinSeptemberthroughNovemberintheU.S.andItaly,andinMarchthroughMayinNewZealandandstoredaswineuntilpackagedforsaleunderourbrandnamesorsoldinbulk.Theinventoriesofwineareusuallyattheirhighestlevelsduringandafterthecrushofeachyear’sgrapeharvestandarereducedassoldthroughouttheyear.

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

Certainofourwinesandspiritsmustbeagedformultipleyears.Therefore,ourinventoriesofwinesandspiritsmaybelargerinrelationtosalesandtotalassetsthaninmanyotherbusinesses.

Resourcesandavailabilityofproductionmaterials

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

For our Mexican beer brands, packagingmaterialsrepresentthelargestcostcomponentofproduction, with glass bottles representing thelargest cost component of our packagingmaterials.

ForFiscal2021,thepackageformatmixofourMexicanbeer volumesold in theU.S.wasasfollows:

Glassbottles:67%

Aluminumcans:32%

Steelkegs:1%

TheNavaandObregonbreweriesreceivewateroriginatingfromaquifers.Webelievewehaveadequateaccesstowatertosupportthebreweries’on-goingrequirements,aswellasfuturerequirementsafterthecompletionofplannedexpansionactivities.Bothbreweriesalsotakeadvantageofonsitewastewatertreatmentoperationstoreusewaterconsumedaspartoftheproductionprocess.

Aspartofoureffortstosolidifyourbeerglasssourcingstrategyoverthelong-term,weformedanequally-ownedjointventurewithOwens-Illinois,oneoftheleadingmanufacturersofglasscontainersintheworld.Thejointventureownsastate-of-the-artglassproductionplantadjacenttoourNavaBreweryinMexico.Theglassplantcurrentlyhasfiveoperationalglassfurnaceswhichsupplyapproximately55%ofthetotalannualglassbottlesupplyforourMexicanbeerbrands.Wealsohavelong-termglasssupplyagreementswithotherglassproducers.

Theprincipalcomponentsintheproductionofourwineandspiritsproductsareagriculturalproducts,suchasgrapesandgrain,andpackagingmaterials,primarilyglass.

Mostofourannualgraperequirementsaresatisfiedbygrowerpurchasesfromeachyear’sharvestwhichnormallybeginsinAugustandrunsthroughOctoberintheU.S.andItaly,andbeginsinFebruaryandrunsthroughMayinNewZealand.Wereceivegrapesfromapproximately180independentgrowersintheU.S.and55independentgrowerslocatedinNewZealandandItaly.Weenterintopurchaseagreementswithamajorityofthesegrowerswithpricingthatgenerallyvariesyear-to-yearandislargelybasedonthen-currentmarketprices.



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AsofFebruary28,2021,weownedorleasedapproximately18,200acresoflandandvineyards,eitherfullybearingorunderdevelopment,intheU.S.,NewZealand,andItaly.Thisacreagesuppliesonlyasmallpercentageofouroveralltotalgrapeneedsforwineproduction.However,mostofthisacreageisusedtosupplyalargeportionofthegrapesusedfortheproductionofcertainofourhigher-endwines.Wecontinuetoconsiderthepurchaseorleaseofadditionalvineyards,andadditionallandforvineyardplantings,tosupplementourgrapesupply.

Webelievethatwehaveadequatesourcesofgrapesuppliestomeetoursalesexpectations.However,whendemandforcertainwineproductsexceedsexpectations,welooktosourcetheextrarequirementsfromthebulkwinemarketsaroundtheworld.

Thedistilledspiritsmanufacturedandimportedbyusrequirevariousagriculturalproducts,neutralgrainspirits,andbulkspirits,whichwefulfillthroughpurchasesfromvarioussourcesbycontractualarrangementandthroughpurchasesontheopenmarket.Webelievethatadequatesuppliesoftheaforementionedproductsareavailableatthepresenttime.

WeutilizeglassandPETbottlesandothermaterialssuchascaps,corks,capsules,labels,winebags,andcardboardcartonsinthebottlingandpackagingofourwineandspiritsproducts.Aftergrapepurchases,glassbottlecostsarethelargestcomponentofourcostofproductsold.IntheU.S.,theglassbottleindustryishighlyconcentratedwithonlyasmallnumberofproducers.Wehavetraditionallyobtained,andcontinuetoobtain,ourglassrequirementsfromalimitednumberofproducersunderlong-termsupplyarrangements.Currently,oneproducersuppliesmostofourglasscontainerrequirementsforourU.S.operations.Wehavebeenabletosatisfyourrequirementswithrespecttotheforegoingandconsideroursourcesofsupplytobeadequateatthistime.

Governmentregulations

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

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

Aspartofourbreweryexpansioneffortsandcommitmenttomakingapositiveimpactonthecommunitieswhereweoperate,weplantocontinueworkingwithlocalauthoritiesandcommunity-basedorganizationsonsustainabilityinitiativesthatbenefitlocalresidents.Forexample,overthepastseveralyearswehelpedsupportlocalinfrastructureinvestmentsinObregon,Sonora,Mexicothathaveenhancedwaterefficiencyintheregion.Thisisinadditiontootherbenefitsweprovide,includinglocaljobcreationandfuelingeconomicdevelopment.WeareworkingwithlocalauthoritiesinNava,Coahuila,Mexicoonsimilarinitiatives.

Seasonality

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



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ForFiscal2021,ourbeernetsaleswerehigherinthesecondandthirdquartersasinventorylevelsinourdistributionchannelswerereplenishedfollowingaCOVID-19relatedproductionslowdownatourmajorbreweriesinMexicoearlierintheyear.

Humancapitalresources

AsofMarch31,2021,wehadapproximately9,300employees,includingapproximately1,200employeesthroughourequally-ownedjointventurewithOwens-Illinois.Thenumberofemployeesmaychangethroughouttheyear,asweemployadditionalworkersduringthegrapecrushingseasons.Approximately20%oftheemployeesarecoveredbycollectivebargainingagreements.Collectivebargainingagreementsexpiringwithinoneyearareminimal.Weconsiderouremployeerelationsgenerallytobegood.

Employeegeographicdataisasfollows:

U.S.40%

Mexico54%

OtherNon-U.S.6%

COVID-19responseWehaveanexistingCrisisManagementCommitteethatsinceJanuary2020hasbeencloselymonitoring

theimpactofthevirusthatcausesCOVID-19,onourbusinessandourworkforce.InMarch2020,theWHOrecognizedCOVID-19asapandemic.Inresponse,wehaveimplementedvariousmeasurestoreducethespreadofthevirusincludingworkingfromhome,restrictingvisitorstoourproductionlocations,splittingourproductionworkforces,reducingtheon-siteproductionworkforcelevels,screeningworkersbeforetheyenterfacilities,implementingsocialdistancing,andencouragingemployeestoadheretopreventionmeasuresrecommendedbytheCDCandtheWHO.WebelievethesepreventionmeasureshavebeeneffectiveasevidencedbytheminimalnumberofCOVID-19caseswithinourworkforce.Additionally,weaddedaChiefMedicalOfficertoprovidehealth-relatedadviceandexpertisetoourexecutiveofficers,CrisisManagementCommittee,andhumanresourcesleadershipteamsastheymakedecisionstoprotectthehealthandsafetyofourworkforce.

Wevaluethecontributionsofourworkforceandconsideredtheimpactsthepandemicwouldhaveontheirwell-being.Forourproductionworkforce,wepaid“premiumpay”foraperiodoftimewhilesuchemployeescontinuedtoworkon-site.Inaddition,whereemployeeswerenotabletoworkduetotemporaryfacilityclosures,weprotectedtheirpaytoensuretheyhadacontinuedpaycheck.Forourhospitalityemployees,werecognizedamaterialportionoftheirpaycomesfromcustomergratuitiesandwepaidtheseemployeesanequivalentvalueduringourpayprotectionperiod.Ournon-productionworkforceisabletoworkremotelyusingvarioustechnologytools.Aspartoftheremoteofficeapproach,weprovidedreimbursementforhomeofficesupportensuringouremployeeshadtheresourcesneededtobeeffective.WehaveimplementedaformalCOVID-19policyandlaunchedvariousprogramstoassistouremployees,includingengagingwiththird-partywellnessproviderstohostdedicatedsessionsonmentalandphysicalwell-being,andincreasedflexibilityandresourcessurroundingpersonalandfamilycommitments.Wecontinuetoimplementandevolveourcomprehensiveplantoreturntoournon-productionfacilities,withgovernmentrecommendationsandourworkforcesafetyguidinghowwemanageourreturntofacilities.

Diversity,equity,andinclusionOurDE&Istrategicprioritiesareasfollows(i)developabest-in-class,diverseworkforcethatreflectsthe

consumersandcommunitiesweserve–closerepresentationgapstoachievingourdiversitygoals;(ii)developaninclusiveculture–createmoreequitableexperienceforunderrepresentedgroups;harnessthebenefitsofdiversity;and(iii)enhancesocialequity–extendourinfluencewithinthebeveragealcoholindustryandcommunitiesweserve.

WeprovideopportunitiesforouremployeestoadvanceourDE&IstrategicprioritiesthroughagrowingcommunityofBRGs.OurBRGsaresupportedatthehighestlevelwithsponsorshipsfromourexecutives.See“ExecutiveOfficersoftheCompany”below.EachBRGistaskedwithmakingabusinessimpactonbehalfofthe



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representedgroupandwelcomeallies.InFiscal2021,approximately50%ofourU.S.salariedemployeesweremembersofoneormoreBRGs.

MonitoringhumancapitalmetricsisacriticalcomponenttoensuringweareexecutingonourstrategyandmakingprogressagainstourDE&Iobjectivesandgoals.Wemeasuregenderandracialrepresentationtounderstanddiversityatvariouslevelsacrosstheorganization,andassessprogressovertimeandtodrivecontinuousimprovement.Wealsoassessmetricsthroughoutthehumanresourcelifecycletoidentifypotentialbiasandbarriersinourprocesses,includingtalentacquisition,turnover,engagementscores,orparticipationinBRGevents.

CompensationandbenefitsWestrivetoprovidepay,benefits,andservicesthatmeettheneedsofouremployees.Therearefour

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

ProfessionaldevelopmentWearecommittedtoempoweringouremployeestogrowtheircareers.InFiscal2021,wespent

approximately$16millionindevelopmentandtrainingcosts,whichenablesourpeopletokeepreachingforwhat’snext—personallyandprofessionally.

EmployeeengagementWeassessemployeeengagementthroughtargetedpulsesurveys,whichprovidefeedbackonavarietyof

topics,suchascompanydirectionandstrategy,DE&I,individualdevelopment,collaboration,andtrust.Duringcalendaryear2020,wehadanaverageresponserateof78%tooursurveysandanaverageengagementmeasurementof81%acrossoursurveyedpopulation.

SafetyWearecommittedtoensuringthesafetyofouremployees.OurglobalEHSpolicydefinesourdedication

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

FortheYearsEnded

February28,2021

February29,2020

PercentChange

Recordableincidentrate(1) 0.95 1.45 (34%)

Industryaverage(2) 3.50 3.35

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

(2) Calculatedbytakingtheweightedaverageofthemostrecent(2019)U.S.BureauofLaborStatisticsdataforwineries,breweries,anddistilleriesbasedonourportfoliomixonFebruary2021andFebruary2020fortheyearsendedFebruary28,2021,andFebruary29,2020,respectively.



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EmpoweringouremployeestogivebackGivingbacktoourcommunitiesisavalue

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

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

$6.4millionFiscal2021corporatecharitablecontributions,

includingcompanymatchofemployeedonations

CorporatesocialresponsibilityFormorethan75years,wehavebeencommittedtomakingapositivedifferenceinourcommunities,

safeguardingourenvironment,andadvocatingforresponsibleconsumptionofbeveragealcoholproducts.OurCSRstrategyisdesignedtoalignwithourbusinessgoalsandstakeholderinterests,reflectourcompanyvalues,andmoredirectlyaddresspressingsocietalneeds.Specifically,wededicateourresourcestowardsfourfocusareas:

Modelwaterstewardshipforourindustry–Wearecommittedtotheresponsibleandefficientsourcinganduseofwater,andengagingwithourbusinessandcommunitypartnerstoensurewaterprotection,quality,andaccessibility.Beingachampionfortheprofessionaldevelopmentandadvancementofwomen–Wearecommittedtoprovidingresourcesandsupporttoenhancetherepresentationofwomenwithinourcompany,theindustry,andwithinourcommunities.Servingasacatalystforeconomicdevelopmentandprosperityfordisadvantagedcommunities–Wearecommittedtoaddressingtheneedsofdisadvantagedcommunities,withafocusonLatinx/HispanicandBlack/AfricanAmericancommunities.Beaculturecarrierofresponsibleconsumption–Wearecommittedtoempoweringadultstomakeresponsiblechoicesintheiralcohol(substance)consumptionbysupportingfact-basededucation,engagementprograms,andpolicies.

ExecutiveOfficersoftheCompany

ExecutiveofficersoftheCompanyaregenerallychosenorelectedtotheirpositionsannuallyandholdofficeuntiltheearlieroftheirremovalorresignationoruntiltheirsuccessorsarechosenandqualified.Informationwithrespecttoourcurrentexecutiveofficersisasfollows:

WilliamA.Newlands,age62,isthePresidentandChiefExecutiveOfficeroftheCompany.HehasservedasChiefExecutiveOfficeroftheCompanyandasadirectorsinceMarch2019andasPresidentsinceFebruary2018.HeservedasChiefOperatingOfficerfromJanuary2017throughFebruary2019andasExecutiveVicePresidentoftheCompanyfromJanuary2015untilFebruary2018.FromJanuary2016toJanuary2017heperformedtheroleofPresident,Wine&SpiritsDivisionandfromJanuary2015throughJanuary2016heperformedtheroleofChiefGrowthOfficer.Mr.NewlandsjoinedtheCompanyinJanuary2015.PriortothatheservedfromOctober2011untilAugust2014asSeniorVicePresidentandPresident,NorthAmericaof

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



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RobertSands,age62,istheExecutiveChairmanoftheBoardoftheCompany,havingservedintherolesinceMarch2019andasadirectorsinceJanuary1990.Previously,heservedasChiefExecutiveOfficeroftheCompanyfromJuly2007throughFebruary2019.Mr.SandsalsoservedasPresidentfromDecember2002toFebruary2018,asChiefOperatingOfficerfromDecember2002toJuly2007,asGroupPresidentfromApril2000throughDecember2002,asChiefExecutiveOfficer,InternationalfromDecember1998throughApril2000,asExecutiveVicePresidentfromOctober1993throughApril2000,asGeneralCounselfromJune1986throughMay2000,andasVicePresidentfromJune1990throughOctober1993.HeisthebrotherofRichardSands.

RichardSands,Ph.D.,age70,istheExecutiveViceChairmanoftheBoardoftheCompany,havingservedintherolesinceMarch2019.HepreviouslyservedasChairmanoftheBoardfromSeptember1999throughFebruary2019.HehasbeenemployedbytheCompanyinvariouscapacitiessince1979.Hehasservedasadirectorsince1982.HeservedasChiefExecutiveOfficerfromOctober1993toJuly2007,asExecutiveVicePresidentfrom1982toMay1986,asPresidentfromMay1986toDecember2002,andasChiefOperatingOfficerfromMay1986toOctober1993.HeisthebrotherofRobertSands.

JamesO.Bourdeau,age56,istheExecutiveVicePresidentandChiefLegalOfficeroftheCompany,havingservedintherolesinceDecember2017andastheCompany’sSecretarysinceApril2017.Priortothat,heservedastheCompany’sSeniorVicePresidentandGeneralCounsel,CorporateDevelopment,havingperformedthatrolefromSeptember2014untilDecember2017.BeforejoiningtheCompanyinSeptember2014,Mr.BourdeauwasanattorneywiththelawfirmofNixonPeabodyLLPfromJuly2000throughSeptember2014,andapartnerfromFebruary2005throughSeptember2014.Mr.Bourdeauwasassociatedwithanotherlawfirmfrom1995to2000.

BRGsponsorship-STELLARPRIDEsupportingourLGBTQcommunity

GarthHankinson,age53,istheExecutiveVicePresidentandChiefFinancialOfficeroftheCompany,havingservedintherolesinceJanuary2020.Priortothat,heservedastheCompany’sSeniorVicePresident,CorporateDevelopment,apositionhehadbeeninsinceFebruary2016,wherehewasresponsibleforleadingalloftheCompany’sfinancialplanning,reporting,andanalysisactivities,aswellasalleffortsrelatedtomergers,acquisitions,venturesinvestments,andstrategicalliances.FromOctober2009untilFebruary2016,heservedastheVicePresident,CorporateDevelopmentoftheCompany.FromOctober2007untilOctober2009,Mr.HankinsonservedastheVicePresident,BusinessDevelopmentforConstellation’sprior

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

BRGsponsorship-Veterans,ServiceMembers,FirstResponders

RobertHanson,age58,istheExecutiveVicePresidentandPresident,Wine&SpiritsDivisionoftheCompany,havingservedintherolesinceJune2019.Priortothat,heservedasChiefExecutiveOfficerofJohnHardyGlobalLimited,aluxuryjewelrybrand,fromAugust2014toJune2019.HecontinuedtoserveasitsChairmanoftheBoarduntilJuly2020.HeservedasChiefExecutiveOfficerandaDirectorofAmericanEagleOutfitters,Inc.,aleadingglobalspecialtyretailerofclothing,accessories,andpersonalcareproductsfromJanuary2012toJanuary2014.HeservedLeviStrauss&Co.from1988to2011inavarietyofimportantleadershiprolesacrossmultiplebrandswhereheledcross-functionalteams,includingmerchandising,product

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

BRGsponsorship-Win.Inspire.Support.Elevate.supportingourfemalecommunity



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F. PaulHetterich,age58,istheCompany’sExecutiveVicePresidentandPresident,BeerDivisionaswellasPresidentofCrownhavingperformedtheserolessinceJanuary2016.HehasbeenanExecutiveVicePresidentoftheCompanysinceJune2003.FromJanuary2015throughJanuary2016heperformedtheroleofExecutiveVicePresident,CorporateDevelopment&BeerOperations.FromJune2011untilJanuary2015heservedasExecutiveVicePresident,BusinessDevelopmentandCorporateStrategy,fromJuly2009untilJune2011heservedasExecutiveVicePresident,BusinessDevelopment,CorporateStrategyandInternational,andfromJune2003untilJuly2009heservedasExecutiveVicePresident,BusinessDevelopmentandCorporate

Strategy.FromApril2001toJune2003Mr.HetterichservedastheCompany’sSeniorVicePresident,CorporateDevelopment.Priortothat,Mr.HetterichheldseveralincreasinglyseniorpositionsintheCompany’smarketingandbusinessdevelopmentgroups.Mr.HetterichhasbeenwiththeCompanysince1986.

BRGsponsorship-SupportingandAttractingLatinosUnitedforDiversityandDevelopment

ThomasM.Kane,age60,istheExecutiveVicePresidentandChiefHumanResourcesOfficeroftheCompany,havingservedintherolesincejoiningtheCompanyinMay2013.Mr.KanepreviouslyservedasSeniorVicePresident,HumanResourcesandGovernmentRelationsofArmstrongWorldIndustries,Inc.,aglobalproducerofflooringproductsandceilingsystems,fromFebruary2012toMay2013,heservedasitsSeniorVicePresident,HumanResourcesfromAugust2010toFebruary2012andservedasitsChiefComplianceOfficerfromFebruary2011toFebruary2012.Priortothat,Mr.KaneservedasGlobalVicePresident,HumanResourcesforBlack&DeckerPowerTools,amanufacturerofpowerandhandtools,from2002to2010.From

1999to2002Mr.KaneservedasGlobalHRleaderofGESpecialtyMaterials,alargemanufacturerofsiliconeproducts.

BRGsponsorship-Win.Inspire.Support.Elevate.supportingourfemalecommunity

MichaelMcGrew,age47,hasbeenanExecutiveVicePresidentoftheCompanysinceApril2020.BeginningDecember2020,Mr.McGrewhasperformedtheroleofExecutiveVicePresident,andChiefCommunications,CSR,andDiversityOfficeroftheCompany.Mr.McGrewjoinedConstellationBrandsin2014asSeniorDirector,CommunicationsfortheCompany’sBeerDivision.HewaspromotedtoVicePresident,Communications–BeerDivisionin2016andassumedtheroleofVicePresident,CorporateCommunicationsin2017.PriortojoiningConstellationBrands,heheldanumberofroleswithincreasingresponsibilityatGrainger,thena$9billionglobalproviderofindustrialsuppliesandequipment.WhileatGranger,from2011to

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

MallikaMonteiro,age42,hasbeenanExecutiveVicePresidentoftheCompanysinceOctober2019.BeginningMarch2021,Ms.MonteirohasperformedtheroleofExecutiveVicePresident,andChiefGrowth,Strategy,andDigitalOfficer.FromOctober2019toFebruary2021sheperformedtheroleofExecutiveVicePresident,ChiefGrowthandStrategyOfficerandfromOctober2018toSeptember2019,sheperformedtheroleofSeniorVicePresident,ChiefGrowthOfficer.ShejoinedConstellationinOctober2016asVicePresident,BeerInnovationandwasgivenadditionalresponsibilitiesasChiefofStafftotheCompany'sExecutiveManagementCommitteeinAugust2018.PriortojoiningConstellation,fromJuly2014toSeptember2016,

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

BRGsponsorship-ConstellationParentsNetwork



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JamesA.Sabia,Jr.,age59,hasbeenanExecutiveVicePresidentoftheCompanysinceMay2018.BeginningMarch2021,Mr.SabiahasperformedtheroleofExecutiveVicePresident,ManagingDirector,BeerDivision.FromMay2018throughMarch2021heperformedtheroleofExecutiveVicePresident,ChiefMarketingOfficer.HejoinedtheCompanyinAugust2007asVicePresident,MarketingfortheCompany’sspiritsbusiness.Sincethen,hehasservedinrolesofincreasingresponsibilitywiththeCompany.Since2009,hehasservedastheChiefMarketingOfficeroftheCompany’sBeerDivision.From2009toJune2013,Mr.SabiawasemployedbyCrown,ofwhichtheCompanyowneda50%interestandwastheCompany’sbeerbusiness

duringthatperiod.InJune2013,theCompanyacquiredtheremaining50%ofCrown,whichbecameawholly-ownedindirectsubsidiaryoftheCompanyonthatdate.PriortojoiningtheCompany,Mr.SabiawaswithMolsonCoorsBrewingCompanyfor17years.

BRGsponsorship-AfricanAmericansStrengtheningConstellation’sEngagement,Networking,&Development

CompanyInformation

OurInternetwebsiteishttps://www.cbrands.com.OurfilingswiththeSEC,includingourannualreportonForm10-K,quarterlyreportsonForm10-Q,currentreportsonForm8-Kandamendmentstothosereports,filedorfurnishedpursuanttoSection13(a)or15(d)oftheSecuritiesExchangeActof1934,areaccessiblefreeofchargeathttps://www.cbrands.comassoonasreasonablypracticableafterweelectronicallyfilesuchmaterialwith,orfurnishitto,theSEC.TheSECmaintainsanInternetsitethatcontainsreports,proxy,andinformationstatements,andotherinformationregardingissuers,suchasourselves,thatfileelectronicallywiththeSEC.TheInternetaddressoftheSEC’ssiteishttps://www.sec.gov.

WehaveadoptedaChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthicsthatspecificallyappliestoourchiefexecutiveofficer,ourprincipalfinancialofficer,andourcontroller,andisavailableonourInternetsiteathttps://www.cbrands.com/investors.ThisChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthicsmeetstherequirementsassetforthintheSecuritiesExchangeActof1934,Item406ofRegulationS-K.WealsohaveadoptedaCodeofBusinessConductandEthicsthatappliestoallemployees,directors,andofficers,includingeachpersonwhoissubjecttotheChiefExecutiveOfficerandSeniorFinancialExecutiveCodeofEthics.TheCodeofBusinessConductandEthicsisavailableonourInternetwebsite,togetherwithourGlobalCodeofResponsiblePracticesforBeverageAlcoholAdvertisingandMarketingathttps://www.cbrands.com/story/policies.Copiesofthesematerialsareavailableinprinttoanyshareholderwhorequeststhem.ShareholdersshoulddirectsuchrequestsinwritingtoInvestorRelationsDepartment,ConstellationBrands,Inc.,207HighPointDrive,Building100,Victor,NewYork14564,orbytelephoningourInvestorCenterat1-888-922-2150.

OurBoardofDirectorsCorporateGovernanceGuidelinesandtheChartersoftheBoard’sAuditCommittee,HumanResourcesCommittee(whichservesastheBoard’scompensationcommittee)andCorporateGovernanceCommittee(whichservesastheBoard’snominatingcommittee)areaccessibleonourInternetwebsiteathttps://www.cbrands.com/investors.Amendmentsto,andwaiversgrantedtoourdirectorsandexecutiveofficersunderourcodesofethics,ifany,willbepostedinthisareaofourwebsite.

Theinformationregardingourwebsiteanditscontentisforyourconvenienceonly.ThecontentofourwebsiteisnotdeemedtobeincorporatedbyreferenceinthisreportorfiledwiththeSEC.



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Item1A.RiskFactors

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

OperationalRisksSupplyofqualitywater,agricultural,andotherrawmaterials,certainrawmaterialsandpackaging

materialspurchasedundershort-termsupplycontracts,limitedgroupofsuppliersofglassbottlesThequalityandquantityofwateravailableforuseisimportanttothesupplyofouragriculturalraw

materialsandourabilitytooperateourbusiness.Waterisalimitedresourceinmanypartsoftheworldandifclimatepatternschangeanddroughtsbecomemoresevere,theremaybeascarcityofwaterorpoorwaterqualitywhichmayaffectourproductioncostsorimposecapacityconstraints.Wearedependentonsufficientamountsofqualitywaterforoperationofourbreweries,wineries,anddistilleries,aswellastoirrigateourvineyardsandconductourotheroperations.Thesuppliersoftheagriculturalrawmaterialswepurchasearealsodependentuponsufficientsuppliesofqualitywaterfortheirvineyardsandfields.Ifwateravailabletoouroperationsortheoperationsofoursuppliersbecomesscarceorthequalityofthatwaterdeteriorates,wemayincurincreasedproductioncostsorfacemanufacturingconstraints.Inaddition,waterpurificationandwastetreatmentinfrastructurelimitationscouldincreasecostsorconstrainoperationofourproductionfacilitiesandvineyards.Asubstantialreductioninwatersuppliescouldresultinmateriallossesofgrapecropsandvinesorothercrops,suchascorn,barleyorhops,whichcouldleadtoashortageofourproductsupply.

WehavesubstantialbreweryoperationsinthecountryofMexico,breweryoperationsinthestatesofTexas,Virginia,andFlorida,andwecurrentlyhavesubstantialwineoperationsinthestateofCaliforniaaswell.Inthepast,Californiahadenduredanextendedperiodofdroughtandinstitutedrestrictionsonwaterusage,andarecurrenceofsuchconditionscouldhaveanadverseeffectuponthoseoperations.OurMexicobreweryoperationscurrentlyreceiveallocationsofwatersufficientfortheiroperations.ThewatersupplyforourNavaBreweryissourcedfromasinglewatersupply.Althoughweanticipateouroperationswillhaveadequatesourcesofwatertosupporttheiron-goingrequirements,thereisnoguaranteethatthesourcesofwater,methodsofwaterdelivery,orwaterrequirementswillnotchangemateriallyinthefuture.Wemayincuradditionalexpensesforimprovingwaterdeliveryandsecuringadditionalwatersources.

Ourbreweries,theglassplant,ourwineries,andourdistilleriesusealargevolumeofagriculturalandotherrawmaterialstoproducetheirproducts.Theseincludecornstarchandsugars,malt,hops,fruits,yeast,andwaterforourbreweries;sodaashandsilicasandfortheglassplant;grapesandwaterforourwineries;andgrainandwaterforourdistilleries.Ourbreweries,wineries,anddistilleriesalluselargeamountsofvariouspackagingmaterials,includingglass,aluminum,cardboard,andotherpaperproducts.Ourproductionfacilitiesalsouseelectricity,naturalgas,anddieselfuelintheiroperations.Certainrawmaterialsandpackagingmaterialsarepurchasedundercontractsofvaryingmaturities.Thesupply,on-timeavailabilityandpriceofrawmaterials,packagingmaterials,andenergycanbeaffectedbymanyfactorsbeyondourcontrol,includingmarketdemand,globalgeopoliticalevents(especiallyastotheirimpactoncrudeoilprices),droughts,storms,andotherweatherconditionsornaturalorman-madeevents,economicfactorsaffectinggrowthdecisions,inflation,plantdiseases,andtheft.

Ourbreweries,wineries,anddistilleriesarealsodependentuponanadequatesupplyofglassbottles.Glassbottlecostsareoneofourlargestcomponentsofcostofproductsold.WecurrentlyhaveasmallnumberofsuppliersofglassbottlesforourMexicanbeerbrands.IntheU.S.,glassbottleshaveonlyasmallnumberofproducers.Currently,oneproducersuppliesmostofourglasscontainerrequirementsforourU.S.wineandspiritsoperationsandtwoproducerssupplyourglassbottlesforourcraftbeeroperations.

Disruptionsinoursupplychainscouldimpactourabilitytocontinueproduction.Totheextentanyoftheforegoingfactorsincreasesthecostsofourfinishedproductsorleadtoashortageofourproductsupply,wecouldexperienceamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

PARTI ITEM1A.RISKFACTORS


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Relianceuponcomplexinformationsystemsandthird-partyglobalnetworks,cyber-attacks,anddesignandongoingimplementationofournewglobalERP

Wedependoninformationtechnologytoenableustooperateefficientlyandinterfacewithcustomersandsuppliers,maintainfinancialaccuracyandefficiency,andeffectaccurateandtimelygovernmentalreporting.Ifwedonotallocateandeffectivelymanagetheresourcesnecessarytobuildandsustainthepropertechnologyinfrastructure,wecouldbesubjecttotransactionerrors,processinginefficiencies,lossofcustomers,businessdisruptions,lossofordamagetointellectualpropertythroughsecuritybreach,orpenaltiesassociatedwiththefailuretotimelyfilegovernmentalreports.Werecognizethatmanygroupsonaworldwidebasishaveexperiencedincreasesinsecuritybreaches,cyber-attacks,andotherhackingactivitiessuchasdenialofservice,malware,andransomware.Aswithalllargeinformationtechnologysystems,oursystemscouldbepenetratedbyincreasinglysophisticatedoutsideparties’intentonextractingconfidentialorproprietaryinformation,corruptingourinformation,disruptingourbusinessprocesses,orengagingintheunauthorizeduseofstrategicinformationaboutusorouremployees,customers,orconsumers.Suchunauthorizedaccesscoulddisruptouroperationsandcouldresultinthelossofassetsorrevenues,litigation,remediationcosts,damagetoourreputation,orthefailurebyustoretainorattractcustomersfollowingsuchanevent.

Wehaveoutsourcedvariousfunctionstothird-partyserviceprovidersandmayoutsourceotherfunctionsinthefuture.Werelyonthosethird-partyserviceproviderstoprovideservicesonatimelyandeffectivebasis,butwedonotultimatelycontroltheirperformance.Theirfailuretoperformasexpectedorasrequiredbycontract,oracyber-attackonthemthatdisruptstheirsystems,couldresultinsignificantdisruptionsandcoststoouroperationsorapenetrationofoursystems.

WeareintheprocessofimplementinganewglobalERPsystem.WepreviouslyreplacedtheportionofourERPsystemservicingourMexicanoperationsandonMarch1,2021,wereplacedtheportionofourERPsystemservicingourwineandspiritsoperations,U.S.beeroperations,andourcorporateoperations.TheERPsystemfortheremainingportionsofourbusinessisscheduledtobereplacedlaterinFiscal2022.WearedesigningtheERPsystemtoaccuratelymaintainourfinancialrecords,enhanceoperationalfunctionality,andprovidetimelyinformationtoourmanagementteamrelatedtotheoperationofthebusiness.Weexpectourongoingimplementationprocesswillcontinuetorequiretheinvestmentofsignificantpersonnelandfinancialresources.CompanieswhichimplementnewERPsystemsmayexperiencedelays,increasedcosts,andotherdifficulties.IfourERPsystemdesignandimplementationplanisnotsuccessfulorifourERPsystemdoesnotoperateasintended,theeffectivenessofourinternalcontroloverfinancialreportingcouldbeadverselyaffected,ourabilitytoassessthosecontrolsadequatelycouldbedelayed,orwemaynotbeabletooperateourbusiness.

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

EconomicandpoliticaluncertaintiesassociatedwithourinternationaloperationsOurproductsareproducedandsoldinnumerouscountries,wehaveemployeesinvariouscountries,and

wehaveproductionfacilitiescurrentlyintheU.S.,Mexico,NewZealand,andItaly.

Thecountriesinwhichweoperateimposeduties,excisetaxes,and/orothertaxesonbeveragealcoholproducts,and/oroncertainrawmaterialsusedtoproduceourbeveragealcoholproducts,invaryingamounts.Governmentalbodiesmayproposechangestointernationaltradeagreements,treaties,tariffs,taxes,andothergovernmentrulesandregulationsincludingbutnotlimitedtoenvironmentaltreatiesandregulations.Significantincreasesinimportandexcisedutiesorothertaxeson,orthatimpact,beveragealcoholproductscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.Anysuchtariffs,particularlyonimportsfromMexicoandanyretaliatorytariffsimposedbytheMexicangovernment,mayhaveamaterialadverseeffectonourresultsofoperations,includingoursalesandprofitability.

Inaddition,governmentalagenciesextensivelyregulatethebeveragealcoholproductsindustryconcerningsuchmattersaslicensing,warehousing,tradeandpricingpractices,permittedandrequiredlabeling,advertisingandrelationswithwholesalersandretailers.Certainregulationsalsorequirewarninglabelsandsignage.Neworrevisedregulationsorincreasedlicensingfees,requirements,ortaxescouldhaveamaterial



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adverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.Additionally,variousjurisdictionsmayseektoadoptsignificantadditionalproductlabelingorwarningrequirementsorlimitationsonthemarketingorsaleofourproductsbecauseofwhatourproductscontainorallegationsthatourproductscauseadversehealtheffects.Ifthesetypesofrequirementsbecomeapplicabletooneormoreofourmajorproductsundercurrentorfutureenvironmentalorhealthlawsorregulations,theymayinhibitsalesofsuchproducts.

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

DependenceonlimitedfacilitiesforproductionofourMexicanbeerbrands,andexpansionandconstructionissues

WearedependentonourNavaandObregonbreweriesasoursolesourcesofsupplytofulfillourMexicanbeerbrandsproductrequirements,bothnowaswellasforthenear-term.

WeareexpandingourNavaandObregonbreweries.InapublicconsultationprocessinMexicali,BajaCalifornia,Mexico,votersvoicedoppositiontotheconstructionofourMexicaliBrewery,andwehavesuspendedconstructionofthatbrewery.Wearecurrentlyworkingwithlocalauthorities,Mexicangovernmentofficials,andmembersofthecommunityinMexicalionnextstepsrelatedtothatbreweryconstructionprojectandoptionselsewhereinMexicoforourlong-termproductionrequirements.Thesearemulti-million-dollaractivities,withapotentialriskofcompletiondelaysandcostoverruns.

Expansionofcurrentproductionfacilitiesandconstructionofnewproductionfacilitiesaresubjecttovariousregulatoryanddevelopmentalrisks,includingbutnotlimitedto:(i)ourabilitytoobtaintimelycertificateauthorizations,necessaryapprovalsandpermitsfromregulatoryagenciesandontermsthatareacceptabletous;(ii)potentialchangesinfederal,state,andlocalstatutesandregulations,includingenvironmentalrequirements,thatpreventaprojectfromproceedingorincreasetheanticipatedcostoftheproject;(iii)inabilitytoacquirerights-of-wayorlandorwaterrightsonatimelybasisontermsthatareacceptabletous;(iv)inabilitytoacquirethenecessaryenergysupplies,includingelectricity,naturalgas,anddieselfuel;or(v)atemporaryhaltinconstructionactivitiesduetoCOVID-19.Anyoftheseeventscoulddelaytheexpansionorconstructionofourproductionfacilities.

WemaynotbeabletosatisfyourproductsupplyrequirementsfortheMexicanbeerbrandsintheeventofasignificantdisruption,partialdestruction,ortotaldestructionoftheNavaorObregonbreweriesortheglassplant,ordifficultyshippingrawmaterialsandproductintooroutoftheU.S.,ortemporaryinabilitytoproduceourproductduetoclosureorlowerproductionlevelsofoneormoreofourMexicanbreweriesasaresultofCOVID-19.Also,ifthecontemplatedexpansionsoftheNavaandObregonbreweriesandconstructionofadditionalbrewerycapacityinMexicoareabandonedorarenototherwisecompletedbytheirtargetedcompletiondates,wemaynotbeabletoproducesufficientquantitiesofourMexicanbeertosatisfyourneeds.Undersuchcircumstances,wemaybeunabletoobtainourMexicanbeeratareasonablepricefromanothersource,ifatall.AsignificantdisruptionatourNavaorObregonbreweries,ortheglassplant,evenonashort-termbasis,couldimpairourabilitytoproduceandshipproductstomarketonatimelybasis.Alternativefacilitieswithsufficientcapacityorcapabilitiesmaynotreadilybeavailable,maycostsubstantiallymoreormaytakeasignificanttimetostartproduction,anyofwhichcouldhaveamaterialadverseeffectonourproductsupply,business,liquidity,financialcondition,and/orresultsofoperations.

Operationaldisruptionsorcatastrophiclosstobreweries,wineries,otherproductionfacilities,ordistributionsystems

AllofourMexicanbeerbrandsproductsupplyiscurrentlyproducedatourbreweriesinNava,Coahuila,MexicoandObregon,Sonora,Mexico.Manyoftheworkersatthesebreweriesarecoveredbycollectivebargainingagreements,andtheMexicangovernmentisalsoevaluatinglaborreformproposalswhichcouldincreaseourcosts.Theglassplantcurrentlyhasfiveoperationalglassfurnaceswhichsupplyapproximately55%ofthetotalannualglassbottlesupplyforourMexicanbeerbrands.Severalofourvineyardsandproductionanddistributionfacilities,includingcertainCaliforniawineries,areinareaspronetoseismicactivity.Additionally,we



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havevariousvineyardsandwineriesinthestateofCaliforniawhichhasrecentlyexperiencedwildfiresandlandslides.

Ifanyoftheseorotherofourpropertiesandproductionfacilitiesweretoexperienceasignificantoperationaldisruptionorcatastrophicloss,itcoulddelayordisruptproduction,shipments,andrevenue,andresultinpotentiallysignificantexpensestorepairorreplacetheseproperties.Also,ourproductionfacilitiesareassetintensive.Asouroperationsareconcentratedinalimitednumberofproductionanddistributionfacilities,wearemorelikelytoexperienceasignificantoperationaldisruptionorcatastrophiclossinanyonelocationfromactsofwarorterrorism,fires,floods,earthquakes,severewinterstorms,hurricanes,pandemics,laborstrike,orotherlaboractivities,cyber-attacks,andotherattemptstopenetrateourinformationtechnologysystemsortheinformationtechnologyusedbyouremployeeswhoworkfromhomeduringtheCOVID-19pandemic,unavailabilityofraworpackagingmaterials,orothernaturalorman-madeevents.Ifasignificantoperationaldisruptionorcatastrophiclossweretooccur,wecouldbreachagreements,ourreputationcouldbeharmed,andourbusiness,liquidity,financialcondition,and/orresultsofoperationscouldbeadverselyaffectedduetohighermaintenancecharges,unexpectedcapitalspending,orproductsupplyconstraints.

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

Pandemics,suchasthecurrentglobalCOVID-19virus,outbreaksofcommunicableinfectionsordiseases,orotherpublichealthconcernsinthemarketsinwhichourconsumersoremployeesliveand/orinwhichweorourdistributors,retailers,andsuppliersoperate

Diseaseoutbreaksandotherpublichealthconditionscouldresultindisruptionsanddamagetoourbusinesscausedbypotentialnegativeconsumerpurchasingbehavioraswellasdisruptiontooursupplychains,productionprocesses,andoperations.Consumerpurchasingbehaviormaybeimpactedbyreducedconsumptionbyconsumerswhomaynotbeabletoleavehomeorotherwiseshopinanormalmannerasaresultofquarantinesorothercancellationsofpubliceventsandotheropportunitiestopurchaseourproducts,frombarandrestaurantclosures,orfromareductioninconsumerdiscretionaryincomeduetoreducedorlimitedworkandlayoffs.Supplydisruptionmayresultfromrestrictionsontheabilityofemployeesandothersinthesupplychaintotravelandwork,suchascausedbyquarantineorindividualillness,orwhichmayresultfromborderclosuresimposedbygovernmentstodeterthespreadofcommunicableinfectionordisease,ordeterminationsbyusoroursuppliersordistributorstotemporarilysuspendoperationsinaffectedareas,orotheractionswhichrestricttheabilitytodistributeourproductsorwhichmayotherwisenegativelyimpactourabilitytoproduce,bottleandshipourproduct,forourdistributorstodistributeourproducts,orforoursupplierstoprovideusourrawmaterials.Portsorchannelsofentrymaybeclosedoroperateatonlyaportionofcapacity,ortransportationofproductwithinaregionorcountrymaybelimited,ifworkersareunabletoreporttoworkduetotravelrestrictionsorpersonalillness.Ouroperationsandtheoperationsofoursuppliersmaybecomelessefficientorotherwisebecomenegativelyimpactedifourexecutiveleadersorotherpersonnelcriticaltoouroperationsareunabletoworkorifasignificantpercentageoftheworkforceisunabletoworkorisrequiredtoworkfromhome.Ourcyber-securitycouldbecompromisedifpersonswhoareforcedtoworkfromhomedonotmaintainadequateinformationsecurity.Aprolongedquarantineorborderclosurecouldresultintemporaryorlonger-termdisruptionsofsalespatterns,consumptionandtradepatterns,supplychains,productionprocesses,andoperations.Awidespreadhealthcrisis,suchastheCOVID-19pandemic,couldnegativelyaffecttheeconomiesandfinancialmarketsofmanycountriesresultinginaglobaleconomicdownturnwhichcouldnegativelyimpactdemandforourproductsandourabilitytoborrowmoney.Anyoftheseeventscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

ClimatechangeandenvironmentalregulatorycomplianceOurbusinessdependsuponagriculturalactivityandnaturalresources.Therehasbeenmuchpublic

discussionrelatedtoconcernsthatcarbondioxideandothergreenhousegasesintheatmospheremayhaveanadverseimpactonglobaltemperatures,weatherpatterns,andthefrequencyandseverityofextremeweatherandnaturaldisasters.Severeweatherevents,suchasdroughtorfloodinginCaliforniaoranunexpectedseverewinter



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storminTexasorMexico,andclimatechangemaynegativelyaffectagriculturalproductivityintheregionsfromwhichwepresentlysourceourvariousagriculturalrawmaterialsortheenergysupplypoweringourproductionfacilities.Decreasedavailabilityofourrawmaterialsmayincreasethecostofgoodsforourproducts.Severeweathereventsorchangesinthefrequencyorintensityofweathereventscanalsodisruptoursupplychain,whichmayaffectproductionoperations,insurancecostandcoverage,aswellasdeliveryofourproductstowholesalers,retailers,andconsumers.Naturaldisasterssuchasseverestorms,floods,andearthquakesmayalsonegativelyimpacttheabilityofconsumerstopurchaseourproducts.

Wemayexperiencesignificantfutureincreasesinthecostsassociatedwithenvironmentalregulatorycompliance,includingfees,licenses,andthecostofcapitalimprovementsforouroperatingfacilitiestomeetenvironmentalregulatoryrequirements.Inaddition,wemaybepartytovariousenvironmentalremediationobligationsarisinginthenormalcourseofourbusinessorrelatingtohistoricalactivitiesofbusinessesweacquire.Duetoregulatorycomplexities,uncertaintiesinherentinlitigation,andtheriskofunidentifiedcontaminantsinourcurrentandformerproperties,thepotentialexistsforremediation,liability,andindemnificationcoststodiffermateriallyfromthecoststhatwehaveestimated.Wemayincurcostsassociatedwithenvironmentalcompliancearisingfromeventswecannotcontrol,suchasunusuallyseverefloods,hurricanes,earthquakes,orfires.Wecannotassurethatourcostsinrelationtothesematterswillnotexceedourprojectionsorotherwisehaveamaterialadverseeffectuponourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Relianceonwholesaledistributors,majorretailers,andgovernmentagenciesLocalmarketstructuresanddistributionchannelsvaryworldwide.WithinourprimarymarketintheU.S.,

weofferarangeofbeveragealcoholproductswithgenerallyseparatedistributionnetworksutilizedforourbeerportfolioandourwineandspiritsportfolio.IntheU.S.,wesellourproductsprincipallytowholesalersforresaletoretailoutletsanddirectlytogovernmentagencies.WehaveanexclusivearrangementwithonewholesalerthatwillgeneratealargeportionofourU.S.wineandspiritsnetsales.Wholesalersandretailersofourproductsofferproductswhichcompetedirectlywithourproductsforretailshelfspace,promotionalsupportandconsumerpurchases,andwholesalersorretailersmaygivehigherprioritytoproductsofourcompetitors.Thereplacementorpoorperformanceofourmajorwholesalers,retailers,orgovernmentagenciescouldresultintemporaryorlonger-termsalesdisruptionsorcouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

Contaminationanddegradationofproductqualityfromdiseases,pests,andtheeffectsofweatherandclimateconditions

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

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

Ifanyofourproductsbecomeunsafeorunfitforconsumption,aremisbranded,orcauseinjury,wemayhavetoengageinaproductrecalland/orbesubjecttoliabilityandincuradditionalcosts.Awidespreadproduct



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recall,multipleproductrecalls,orasignificantproductliabilityjudgmentcouldcauseourproductstobeunavailableforaperiod,whichcouldfurtherreduceconsumerdemandandbrandequity.

MarijuanaiscurrentlyillegalunderU.S.federallawandinotherjurisdictions;wedonotcontrolCanopy’sbusinessoroperations

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

WehavetherighttonominatefourmembersoftheCanopyboardofdirectors.WhilewedonotcontrolCanopy’sbusinessoroperations,wedorelyonCanopy’sinternalcontrolsandproceduresforoperationofthatbusiness.Nevertheless,ourfinancingarrangementsrequireustocertify,amongotherthings,thattoourknowledge(i)CanopyisproperlylicensedandoperatinginaccordancewithCanadianlawsinallmaterialrespects;(ii)Canopydoesnotknowinglyorintentionallypurchase,manufacture,distribute,import,and/orsellmarijuana,oranyothercontrolledsubstanceinorfromtheU.S.oranyotherjurisdiction,ineachcase,wheresuchpurchase,manufacture,distribution,importation,orsaleofmarijuanaorsuchothercontrolledsubstanceisillegal,exceptincompliancewithallapplicablefederal,state,local,orforeignlaws,rulesandregulations;and(iii)Canopydoesnotknowinglyorintentionallypartnerwith,investin,ordistributemarijuanaoranyothercontrolledsubstancetoanythird-partythatknowinglyorintentionallypurchases,sells,manufactures,ordistributesmarijuanaoranyothercontrolledsubstanceintheU.S.oranyotherjurisdiction,ineachcase,wheresuchpurchase,sale,manufacture,ordistributionofmarijuanaorsuchothercontrolledsubstanceisillegal,exceptincompliancewithallapplicableFederal,state,local,orforeignlaws,rulesandregulations.WerewetoknowthatCanopywasknowinglyorintentionallyviolatinganyoftheseapplicablelaws,wewouldbeunabletomaketherequiredcertificationunderourfinancingarrangements,whichcouldleadtoadefaultunderthosefinancingarrangements.

StrategicRisksPotentialdeclineintheconsumptionofproductswesell;dependenceonsalesofourMexicanbeerbrandsOurbusinessdependsuponconsumers’consumptionofourbeer,wine,andspiritsbrands,andsalesof

ourMexicanbeerbrandsintheU.S.areasignificantportionofourbusiness.Accordingly,adeclineinthegrowthrate,amount,orprofitabilityofoursalesoftheMexicanbeerbrandsintheU.S.couldadverselyaffectourbusiness,liquidity,financialcondition,and/orresultsofoperations.Further,consumerpreferencesandtastesmayshiftdueto,amongotherreasons,changingtastepreferences,demographics,orperceivedvalue.Consequently,anymaterialshiftinconsumerpreferencesandtasteinourmajormarketsawayfromourbeer,wine,andspiritsbrands,andourMexicanbeerbrandsinparticular,orfromthecategoriesinwhichtheycompetecouldhaveanegativeimpactonourbusiness,liquidity,financialcondition,and/orresultsofoperations.Consumerpreferencesmayshiftduetoavarietyoffactors,includingchangesindemographicorsocialtrends,publichealthpoliciesmaybeputintoeffecttodealwiththespreadofCOVID-19,andchangesinleisure,dining,andbeverageconsumption



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patterns.Alimitedorgeneraldeclineinconsumptioninoneormoreofourproductcategoriescouldoccurinthefutureduetoavarietyoffactors,including:

• ageneraldeclineineconomicorgeopoliticalconditions;• concernaboutthehealthconsequencesofconsumingbeveragealcoholproductsandaboutdrinking

anddriving;• ageneraldeclineintheconsumptionofbeveragealcoholproductsinon-premiseestablishments,

whichmayresultfromstricterlawsrelatingtodrivingwhileundertheinfluenceofalcohol;• theincreasedactivityofanti-alcoholgroups;• increasedfederal,state,provincial,andforeignexcise,orothertaxesonbeveragealcoholproducts

andpossiblerestrictionsonbeveragealcoholadvertisingandmarketing;• increasedregulationplacingrestrictionsonthepurchaseorconsumptionofbeveragealcoholproducts

orincreasingpricesduetotheimpositionofdutiesorexcisetaxorchangestointernationaltradeagreementsortariffs;

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

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

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

Wemayalsodivestourselvesofbusinesses,assets,orsecuritiesofcompaniesthatwebelievenolongerprovideastrategicfitwithourbusiness.Wemayprovidevariousindemnificationsinconnectionwiththedivestitureofbusinessesorassets.Divestituresofportionsofourbusinessmayalsoresultincostsstrandedinourremainingbusiness.Delaysindevelopingorimplementingplanstoaddresssuchcostscoulddelayorpreventtheaccomplishmentofourfinancialobjectives.

Wehavealsoacquiredorretainedownershipinterestsincompanieswhichwedonotcontrol,suchasourjointventuretooperateaglassplantadjacenttoourNavaBrewery,ourinterestinCanopy,andinvestmentsmadethroughourcorporateventurescapitalfunction,andhaveacquiredcontrolofcompanieswhichwedonotwhollyown,suchasour75%interestinNelson’sGreenBrier.Ourjointventurepartnersortheotherpartiesthatholdtheremainingownershipinterestsincompanieswhichwedonotcontrolmayatanytimehaveeconomic,business,orlegalinterestsorgoalsthatareinconsistentwithourgoalsorthegoalsofthejointventuresorthosecompanies.Ourjointventurearrangementsandthearrangementsthroughwhichweacquiredorholdourotherequityormembershipinterestsmayrequireus,amongothermatters,topaycertaincosts,tomakecapitalinvestments,tofulfillaloneourjointventurepartners’obligations,ortopurchaseotherparties’interests.Theentitiesinwhichwehaveaninterestmaybesubjecttolitigationwhichmayhaveanadverseimpactontheirabilitytodobusinessorunderwhichtheymayincurcostsandexpenseswhichcouldhaveamaterialadverseimpactontheiroperationsorfinancialconditionwhich,inturn,couldnegativelyimpactthevalueofourinvestment.Theinternalcontroloverfinancialreportingofentitieswhichweconsolidatebuteitherdonotcontrolordonotwhollyown,maynotbeasrobustasourinternalcontrols.

WepreviouslyincreasedourinvestmentinCanopythroughexerciseofourwarrantsinCanopyandwemayfurtherincreaseourinvestmentinthefuture.Whilewewillnotdevelop,distribute,manufacture,orsellcannabisproductsintheU.S.,oranywhereelseintheworld,unlesslegallypermissibletodosoatall



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governmentallevelsintheparticularjurisdiction,thisinvestmentcouldaffectconsumerperceptionofourexistingbrandsandourreputationwithvariousconstituencies.

Inaddition,ourcontinuedsuccessdepends,inpart,onourabilitytodevelopnewproductssuchasourCoronaHardSeltzer.Thelaunchandongoingsuccessofnewproductsareinherentlyuncertain,especiallywithrespecttoconsumerappeal.Anewproductlaunchcangiverisetoavarietyofcosts.Anunsuccessfullaunch,amongotherthings,canaffectconsumerperceptionofexistingbrands,andourreputation.Unsuccessfulimplementationorshort-livedpopularityofourproductinnovationsmayresultininventorywrite-offsandothercosts.

Wecannotassurethatwewillrealizetheexpectedbenefitsofacquisitions,divestitures,orinvestments.Wealsocannotassurethatouracquisitions,investments,orjointventureswillbeprofitableorthatforecastsregardingacquisition,divestiture,orinvestmentactivitieswillbeaccurateorthattheinternalcontroloverfinancialreportingofentitieswhichwemustconsolidateasaresultofourinvestmentactivitieswillbeasrobustastheinternalcontroloverfinancialreportingforourwholly-ownedentities.Ourfailuretoadequatelymanagetherisksassociatedwithacquisitionsordivestitures,orthefailureofanentityinwhichwehaveanequityormembershipinterest,couldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

OurCanopyinvestmentisdependentuponanemergingmarketandlegalsalesofcannabisproductsThelegalcannabismarketisanemergingmarket.ThelegislativeframeworkpertainingtotheCanadian

cannabismarket,aswellascannabismarketsinothercountries,isuncertain.ThesuccessoftheCanopytransactionswilldependon,amongotherthings,theabilityofCanopytocreateastrongplatformtooperatesuccessfullyinthecannabismarketspace,consumerdemandforitsproducts,andthepresenceofsufficientretailoutlets.Therearealsoconcernsabouthealthissuesassociatedwithcertaintypesofformfactorsforcannabisproducts,suchasthoseusedinvaping.Theseissuesmayresultinalessrobustconsumerdemandforcertainformfactors.ThereisnoassurancearobustcannabisconsumermarketwilldevelopconsistentwithourexpectationsorthatconsumerswillpurchaseanyCanopyproducts.

Thechanginglegallandscapeandthelackofconsumermarketdatamakesitdifficulttopredictthepaceatwhichthecannabismarketmaygrow,ifatall,andtheproductsthatconsumerswillpurchaseinthecannabismarketplace.

Forexample,theCanadianCannabisActprohibitstestimonials,lifestylebrandingandpackagingthatisappealingtoyouth.Therestrictionsonadvertising,marketing,andtheuseoflogosandbrandnamescouldhaveamaterialadverseeffectonCanopy’sbusiness,liquidity,financialcondition,and/orresultsofoperations,andourinvestmentinCanopy.

Additionally,CanopymustrelyonitsownmarketresearchtoforecastsalesasdetailedforecastsmaynotbefullyavailableatthisearlystageinthecannabisindustryinCanadaandglobally.Marketresearchrelatingtotheadult-userecreationallegalcannabisindustryisinitsearlystagesand,assuch,trendscanonlybeforecasted.

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

Dependenceupontrademarksandproprietaryrights,failuretoprotectourintellectualpropertyrightsOurfuturesuccessdependssignificantlyonourabilitytoprotectourcurrentandfuturebrandsand

productsandtodefendourintellectualpropertyrights.Wehavebeengrantednumeroustrademarkregistrationscoveringourbrandsandproductsandhavefiled,andexpecttocontinuetofile,trademarkapplicationsseekingtoprotectnewlydevelopedbrandsandproducts.Wecannotbesurethattrademarkregistrationswillbeissuedwithrespecttoanyofourtrademarkapplications.Wecouldalso,byomission,failtotimelyreneworprotectatrademarkandourcompetitorscouldchallenge,invalidate,orcircumventanyexistingorfuturetrademarksissued



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to,orlicensedby,us.OnFebruary15,2021,CerveceríaModelodeMéxico,S.deR.L.deC.V.filedalawsuitintheUnitedStatesDistrictCourtfortheSouthernDistrictofNewYorkagainstoursubsidiariesCBBrandStrategies,LLC,Crown,andCompañíaCerveceradeCoahuila,S.deR.L.deC.V.,alleging,amongotherthings,thatoursublicenseofthetrademarksforourMexicanbeerbrandsshouldnotpermitustousetheCoronabrandnameonourCoronaHardSeltzer.Whilewebelievethislawsuitiswithoutmerit,ifwearenotsuccessful,wemaynotbeabletomarketourhardseltzerproductinitscurrentformulationundertheCoronabrandnamewhichmayhaveanadverseeffectonourbusinessandfinancialcondition.

FinancialRisksIndebtednessWehaveincurredindebtednesstofinanceinvestmentsandacquisitions,fundbeeroperationsexpansion

andconstructionactivities,paycashdividends,andrepurchasesharesofourcommonstock.Inthefuture,wemaycontinuetoincuradditionalindebtednesstofinanceinvestmentsandacquisitions,paycashdividends,repurchasesharesofourstock,andfundothergeneralcorporatepurposes,includingbeeroperationsexpansionandconstructionactivities.Wecannotassurethatourbusinesswillgeneratesufficientcashflowfromoperationstomeetallourdebtservicerequirements;returnvaluetoshareholderssuchasthroughpaymentofdividendsorrepurchaseofsharesofourcommonstock;andfundourgeneralcorporateandcapitalrequirements.

Ourcurrentandfuturedebtserviceobligationsandcovenantscouldhaveimportantconsequences.Theseconsequencesinclude,ormayinclude,thefollowing:

• ourabilitytoobtainfinancingforfutureworkingcapitalneedsorinvestments/acquisitionsorotherpurposesmaybelimited;

• ourfundsavailableforoperations,expansionsandconstruction,dividends,orotherdistributions,orstockrepurchasesmaybereducedbecausewededicateasignificantportionofourcashflowfromoperationstothepaymentofprincipalandinterestonourindebtedness;

• ourabilitytoconductourbusinesscouldbelimitedbyrestrictivecovenants;and• ourvulnerabilitytoadverseeconomicconditionsmaybegreaterthanlessleveragedcompetitorsand,

thus,ourabilitytowithstandcompetitivepressuresmaybelimited.

Additionally,anyfailuretomeetrequiredpaymentsonourdebt,orfailuretocomplywithanycovenantsintheinstrumentsgoverningourdebt,couldresultinaneventofdefaultunderthetermsofthoseinstrumentsandadowngradetoourcreditratings.Adowngradeinourcreditratingswouldincreaseourborrowingcostsandcouldaffectourabilitytoissuecommercialpaper.Certainofourdebtfacilitiesalsocontainchangeofcontrolprovisionswhich,iftriggered,mayresultinanaccelerationofourobligationtorepaythedebt.Inaddition,certainofourcurrentandfuturedebtandderivativefinancialinstrumentshave,orinthefuture,couldhaveinterestratesthataretiedtoreferencerates,suchasLIBORorSOFR.Thevolatilityandavailabilityofsuchreferencerates,includingestablishmentofalternativereferencerates,isoutofourcontrol.Changestoortheunavailabilityofsuchratesorthemannerforcalculationofsuchreferencerates,couldresultinincreasestothecostofourdebt.

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

SecuritiesmeasuredatfairvalueThevalueofthewarrantsandconvertibledebtweholdinCanopythroughoursubsidiariesissubjectto

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

• actualoranticipatedfluctuationsinCanopy’sreportedresultsofoperations;



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• recommendationsbysecuritiesanalysts;• impactofCOVID-19onCanopy’soperationsandrevenues,onCanopy’sabilitytoaccessfinancial

markets,andonthecannabisindustrygenerally;• changesinthemarketvaluationsofcompaniesintheindustryinwhichCanopyoperates;• announcementofdevelopmentsandmaterialeventsbyCanopyoritscompetitors;• fluctuationsinthecostsofvitalproductionmaterialsandservices;• additionordepartureofCanopyexecutiveofficersorotherkeypersonnel;• newsreportsrelatingtotrends,concerns,technological,orcompetitivedevelopments,regulatory

changesandotherrelatedissuesinCanopy’sindustryortargetmarkets;• regulatorychangesaffectingthecannabisindustrygenerallyandCanopy’sbusinessandoperations;

and• administrativeobligationsassociatedwithHealthCanadarequirementsandcompliancewithall

associatedrulesandregulationsincluding,butnotlimitedto,theCanadianCannabisAct.

OurfinancialstatementsaresubjecttothevolatilityofthemarketpriceofCanopy’scommonstock.WecurrentlyaccountforoursharesinCanopyundertheequitymethod.WerecognizeourequityinCanopy’searningsonatwo-monthlagprimarilybecauseoftheavailabilityofCanopy’sfinancialresultssinceCanopy’sfiscalyearendsannuallyMarch31whileourfiscalyearendsannuallyonthelastdayofFebruary.

Canopy’scorporategovernanceandvaluationCanopy’sbusinessissubjecttoevolvingcorporategovernanceandpublicdisclosureregulationsthatmay

fromtimetotimeincreasebothCanopy’scompliancecostsandtheriskofitsnon-compliance.Theseincludechangingrulesandregulationspromulgatedbyanumberofgovernmentalandself-regulatedorganizations,including,butnotlimitedto,theCanadianSecuritiesAdministrators,theTSX,theInternationalAccountingStandardsBoard,theSEC,Nasdaq,andpreviouslytheNYSE.TheserulescontinuetoevolveinscopeandcomplexitycreatingnewrequirementsforCanopy.CanopywaspreviouslyexemptfromcertainNYSEcorporategovernancerequirementsbecauseitwasaforeignprivateissuer.AsofSeptember30,2019,itnolongermetthetesttoqualifyasaforeignprivateissuer.EffectiveApril1,2020,CanopywasrequiredtocomplywithalltheNYSEcorporategovernancerequirementsandtherequirementsofSOXthatrequiremanagementofCanopytoperformanannualassessmentoftheeffectivenessofCanopy’sinternalcontroloverfinancialreportinganditsregisteredpublicaccountingfirmconductanindependentassessmentoftheeffectivenessofsuchcontrols.InNovember2020,CanopydelistedfromtheNYSEandtransferreditslistingtoNasdaq.CanopyisrequiredtocomplywithapplicableNasdaqlistingstandards.Inthefuture,Canopy’sinternalcontrolsmaynotbeadequate,orCanopymaynotbeabletomaintainadequateandeffectiveinternalcontrolsoverfinancialreportingasrequiredbySOX,oronanongoingbasisifstandardsaremodified,supplemented,oramendedfromtimetotime.Ifnotmaintained,investorscouldloseconfidenceinthereliabilityofitsfinancialstatements,whichcouldharmCanopy’sbusinessandhaveanegativeimpactonthetradingpriceormarketvalueofCanopysecurities.OurinvestmentinCanopycouldbeimpairedifthetradingpriceofitsequityisbelowourcarryingvalueofthatinvestment.

Inaddition,werecordasequityinearningsourproportionalshareofCanopy’sresults.WecouldhaveamaterialweaknessintheeventtheproportionalshareofCanopy’sresultsthatwerecordcontainsanerrorasaresultofanerrorinCanopy’sfinancialstatementsthatwedonotdetect.

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

Classactionorotherlitigationrelatingtoabuseofourproducts,themisuseofourproducts,productliability,ormarketingorsalespractices

Therehasbeenpublicattentiondirectedatthebeveragealcoholindustry,whichwebelieveisduetoconcernoverproblemsrelatedtoharmfuluseofalcohol,includingdrinkinganddriving,underagedrinkingandhealthconsequencesfromthemisuseofalcohol.Wecouldbeexposedtolawsuitsrelatingtoproductliabilityormarketingorsalespractices.Adversedevelopmentsinlawsuitsconcerningthesetypesofmattersorasignificant



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declineinthesocialacceptabilityofbeveragealcoholproductsthatmayresultfromlawsuitscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

OtherRisksControlbytheSandsfamilyOurClassBCommonStockisprincipallyheldbymembersoftheSandsfamily,eitherdirectlyorthrough

entitiescontrolledbymembersoftheSandsfamily.HoldersofClassACommonStockareentitledtoonevotepershareandholdersofClassBCommonStockareentitledto10votespershare.HoldersofClass1CommonStockgenerallydonothavevotingrights.ThestockownershipoftheSandsfamilyandentitiescontrolledbymembersoftheSandsfamilyrepresentsamajorityofthecombinedvotingpowerofallclassesofourcommonstockasofApril14,2021,votingasasingleclass.Consequently,theSandsfamilyhasthepowertoelectamajorityofourdirectorsandapproveactionsrequiringtheapprovalofthestockholdersoftheCompanyvotingasasingleclass.Inaddition,ifsignificantstockindicesdecidetoprohibittheinclusionofcompanieswithdualclassstructures,thepriceofourClassACommonStockcouldbenegativelyimpactedandcouldbecomemorevolatile.

GeneralRisksInternationaloperations,worldwideanddomesticeconomictrendsandfinancialmarketconditions,

geopoliticaluncertainty,orchangestointernationaltradeagreementsandtariffs,importandexciseduties,othertaxes,orothergovernmentalrulesandregulations

Risksassociatedwithinternationaloperations,anyofwhichcouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations,include:

• changesinlocalpolitical,economic,social,andlaborconditions;• potentialdisruptionfromsocio-economicviolence,includingterrorismanddrug-relatedviolence;• restrictionsonforeignownershipandinvestmentsoronrepatriationofcashearnedincountries

outsidetheU.S.;• importandexportrequirementsandborderaccessibility;• currencyexchangeratefluctuations;• alessdevelopedandlesscertainlegalandregulatoryenvironmentinsomecountries,which,among

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

• inadequatelevelsofcompliancewithapplicableanti-briberylaws,includingtheForeignCorruptPracticesAct.

Unfavorableglobalorregionaleconomicconditions,includingeconomicslowdownandthedisruption,volatility,andtighteningofcreditandcapitalmarkets,aswellasunemployment,taxincreases,governmentalspendingcuts,orareturnofhighlevelsofinflation,couldaffectconsumerspendingpatternsandpurchasesofourproducts.Thesecouldalsocreateorexacerbatecreditissues,cashflowissues,andotherfinancialhardshipsforusandoursuppliers,distributors,retailers,andconsumers.Theinabilityofsuppliers,distributors,andretailerstoaccessliquiditycouldimpactourabilitytoproduceanddistributeourproducts.

Wearealsoexposedtorisksassociatedwithinterestratefluctuations.Wecouldexperiencechangesinourabilitytomanagefluctuationsininterestratesand,accordingly,therecanbenoassurancethatwewillbesuccessfulinreducingthoserisks.

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

DamagetoourreputationThesuccessofourbrandsdependsuponthepositiveimagethatconsumershaveofthosebrandsand

maintainingagoodreputationiscriticaltosellingourbrandedproducts.Ourreputationcouldalsobeimpactednegativelybypublicperception,adversepublicity(whetherornotvalid,suchasthesimilarityofthenameof



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certainofourbrandsortrademarksandatypeofvirus),negativecommentsinsocialmedia,orourresponsesrelatingto:

• aperceivedfailuretomaintainhighethicalandESGstandardsandpracticesforallouroperationsandactivities;

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

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

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

• effortsthatareperceivedasinsufficienttopromotetheresponsibleuseofalcoholorcannabis.

Failuretocomplywithfederal,state,orlocallawsandregulations,maintainaneffectivesystemofinternalcontrols,provideaccurateandtimelyfinancialstatementinformation,orprotectourinformationsystemsagainstserviceinterruptions,misappropriationofdata,orbreachesofsecurity,couldalsohurtourreputation.Damagetoourreputationorlossofconsumerconfidenceinourproductsforanyoftheseorotherreasonscouldresultindecreaseddemandforourproductsandcouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations,aswellasrequireadditionalresourcestorebuildourreputation,competitivepositionandbrandequityandrenewinvestorconfidence.

CompetitionWeareinahighlycompetitiveindustryandoursalescouldbenegativelyaffectedbynumerousfactors

including:

• ourinabilitytomaintainorincreaseprices;• newentrantsinourmarketorcategories;• thedecisionofwholesalers,retailers,orconsumerstopurchasecompetitors’productsinsteadofours;

or• ageneraldeclineinbeveragealcoholconsumptionduetoconsumerdietarypreferencechangesor

consumerssubstitutinglegalizedmarijuanaorothersimilarproductsinlieuofbeveragealcohol.

Salescouldalsobeaffectedbypricing,purchasing,financing,operational,advertising,orpromotionaldecisionsmadebywholesalers,stateandotherlocalagencies,andretailerswhichcouldaffecttheirsupplyof,orconsumerdemandfor,ourproducts.Wecouldalsoexperiencehigherthanexpectedselling,general,andadministrativeexpensesifwefinditnecessarytoincreasethenumberofourpersonnelorouradvertisingormarketingexpenditurestomaintainourcompetitivepositionorforotherreasons.Wecannotguaranteethatwewillbeabletoincreaseourpricestopassalongtoourcustomersanyincreasedcostsweincur.

Intangibleassets,suchasgoodwillandtrademarksWehaveasignificantamountofintangibleassetssuchasgoodwillandtrademarksandmayacquiremore

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

Changestotaxlaws,fluctuationsinoureffectivetaxrate,accountingfortaxpositions,andtheresolutionoftaxdisputes,andchangestoaccountingstandards,elections,orassertions

TheU.S.federalbudgetandindividualstate,provincial,localmunicipalbudgetdeficits,ordeficitsinothergovernmentalentities,couldresultinincreasedtaxesonourproducts,business,customers,orconsumers.Variousproposalstoincreasetaxesonbeveragealcoholproductshavebeenmadeatthefederalandstatelevelsoratothergovernmentalbodiesinrecentyears.Federal,state,provincial,local,orforeigngovernmentalentitiesmayconsiderincreasingtaxesuponbeveragealcoholproductsastheyexploreavailablealternativesforraisingfunds.



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

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

Quarterlycashdividendsandsharerepurchasesaresubjecttoanumberofuncertainties,andmayaffectthepriceofourcommonstock

Ourcapitalallocationstrategycontemplatescashdividendsandsharerepurchasesunderoursharerepurchaseprogram.Wefundourcashdividendsandsharerepurchasesthroughacombinationofoperatingfreecashflow,borrowings,anddivestitureproceeds.However,wearenotrequiredtodeclaredividendsortomakeanysharerepurchasesunderoursharerepurchaseprogram.Wemaydiscontinue,accelerate,suspend,ordelayourdividendsandsharerepurchasesatanytimewithoutpriornotice.Evenifnotdiscontinued,theamountofsuchdividendsandrepurchasesmaybechanged,andtheamount,timing,andfrequencyofsuchdividendsandsharerepurchasesmayvaryfromhistoricalpracticeorfromourstatedexpectations.DecisionswithrespecttodividendsandsharerepurchasesaresubjecttothediscretionofourBoardofDirectorsandwillbebasedonavarietyoffactors.Importantfactorsthatcouldcauseustodiscontinue,limit,suspend,increase,ordelayourcashdividendsorsharerepurchasesincludemarketconditions,thepriceofourcommonstock,thenaturesandtimingofotherinvestmentopportunities,changesinourbusinessstrategy,thetermsofourfinancingarrangements,ouroutlookastoourabilitytoobtainfinancingatattractiverates,theimpactonourcreditratings,andtheavailabilityofcash.Thereductionoreliminationofourcashdividend,orlongersuspensionoreliminationofoursharerepurchaseprogramcouldadverselyaffectthemarketpricesofourcommonstock.Additionally,therecanbenoassurancethatanysharerepurchaseswillenhanceshareholdervaluebecausethemarketpriceofourcommonstockmaydeclinebelowthelevelsatwhichwerepurchasedsharesofcommonstock,andshort-termstockpricefluctuationscouldreducetheprogram’seffectiveness.



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Item2.Properties

Weoperatebreweries,wineries,distillingplants,andbottlingplants,manyofwhichincludewarehousinganddistributionfacilitiesonthepremises,andthroughajointventure,weoperateaglassproductionplant.Inadditiontoourmaterialpropertiesdescribedbelow,certainofourbusinessesmaintainofficespaceforsalesandsimilaractivitiesandoffsitewarehouseanddistributionfacilitiesinavarietyofgeographiclocations.

OurcorporateheadquartersarelocatedinleasedofficesinVictor,NewYork.OursegmentsalsomaintainleasedofficespacesinotherlocationsintheU.S.andinternationally.

Webelievethatourfacilities,takenasawhole,areingoodconditionandworkingorder.WithintheWineandSpiritssegment,wehaveadequatecapacitytomeetourneedsfortheforeseeablefuture.WithintheBeersegment,wehaveadequatecapacitytomeetourcurrentneedsandwehaveundertakenactivitiestoincreaseourproductioncapacitytoaddressouranticipatedfuturedemand.AsofFebruary28,2021,ourmaterialpropertiesbysegment,allofwhichareowned,unlessotherwisenoted,consistof:

Beer WineandSpirits

Breweries

●CompañíaCerveceradeCoahuilainNava,Coahuila,Mexico

●CompañíaCerveceradeObregóninObregon,Sonora,Mexico

Glassproductionplant

●IndustriaVidrieradeCoahuilainNava,Coahuila,Mexico(1)

Wineries

●GonzalesWineryinGonzales,California,U.S.

●MissionBellWineryinMadera,California,U.S.

●WoodbridgeWineryinAcampo,California,U.S.

●DrylandsWineryinMarlborough,SouthIsland,NewZealand

Warehouse,distribution,andotherproductionfacilities

●LodiDistributionCenterinLodi,California,U.S.(2)

●PontassieveWineryinFlorence,Italy

(1) TheglassproductionplantinNava,Coahuila,Mexicoisownedandoperatedbyanequally-ownedjointventurewithOwens-IllinoisandislocatedadjacenttoourNavaBrewery.

(2) ThedistributioncenterinLodi,Californiaisaleasedfacility.

WithinourWineandSpiritssegment,asofFebruary28,2021,weowned,leased,orhadinterestsinapproximately10,100acresofvineyardsinCalifornia(U.S.),6,800acresofvineyardsinNewZealand,and1,300acresofvineyardsinItaly.

Item3.LegalProceedings

ForinformationregardingLegalProceedings,seeRiskFactorsandNote16.

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Item5.MarketforRegistrant’sCommonEquity,RelatedStockholderMatters,andIssuerPurchasesofEquitySecurities

OurClassACommonStockandClassBCommonStocktradeontheNYSEunderthesymbolsSTZandSTZ.B,respectively.ThereisnopublictradingmarketforourClass1CommonStock.AtApril14,2021,thenumberofholdersofrecordofourClassACommonStock,ClassBCommonStock,andClass1CommonStockwere502,95,and13,respectively.

Forinformationregardingdividendsandsharerepurchaseprograms,seeMD&A.

Forinformationonsecuritiesauthorizedforissuanceunderourequitycompensationplans,seeSecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMattersunderItem12.ofthisForm10-K.

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Item7.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations

Introduction

Wehaveelectedtoomitdiscussionontheearliestofthethreeyearscoveredbytheconsolidatedfinancialstatementspresented.RefertoItem7.“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”and“LiquidityandCapitalResources”locatedinourForm10-KforthefiscalyearendedFebruary29,2020,filedonApril21,2020,forreferencetodiscussionofthefiscalyearendedFebruary28,2019,theearliestofthethreefiscalyearspresented.ThisMD&A,whichshouldbereadinconjunctionwithourFinancialStatements,isorganizedasfollows:

Overview.Thissectionprovidesageneraldescriptionofourbusiness,whichwebelieveisimportantinunderstandingtheresultsofouroperations,financialcondition,andpotentialfuturetrends.

Strategy.Thissectionprovidesadescriptionofourstrategyandadiscussionofrecentdevelopments,significantinvestments,acquisitions,anddivestitures.

Resultsofoperations.Thissectionprovidesananalysisofourresultsofoperationspresentedonabusinesssegmentbasis.Inaddition,abriefdescriptionofsignificanttransactionsandotheritemsthataffectthecomparabilityoftheresultsisprovided.

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

Criticalaccountingpoliciesandestimates.Thissectionidentifiesaccountingpoliciesthatareconsideredimportanttoourresultsofoperationsandfinancialcondition,requiresignificantjudgmentandinvolvesignificantmanagementestimates.Oursignificantaccountingpolicies,includingthoseconsideredtobecriticalaccountingpolicies,aresummarizedinNote1.

Overview

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

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

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Strategy

OurbusinessstrategyfortheBeersegmentfocusesonleadingthehigh-endsegmentoftheU.S.beermarket.ThisincludescontinuedfocusongrowingourbeerportfoliointheU.S.throughexpandingdistributionforkeybrands,aswellasNPDandinnovationwithintheexistingportfolioofbrands,andcontinuedexpansionandconstructionactivitiesforourMexicobeeroperations.Additionally,inanefforttomorefullycompeteingrowingsectorsofthehigh-endsegmentoftheU.S.beermarket,wehaveleveragedourinnovationcapabilitiestointroducenewbrandsthatalignwithconsumertrends.

WehavemorethantripledtheproductioncapacityoftheNavaBrewerysinceits2013acquisition.InearlyFiscal2022,wecompletedpartofaplannedexpansionofourObregonBrewery.ExpansioneffortscontinueunderourMexicoBeerProjectstoalignwithouranticipatedfuturegrowthexpectations.However,atthistime,wehavesuspendedallMexicaliBreweryconstructionactivities,followinganegativeresultfromapublicconsultationheldinMexico.See“Capitalexpenditures”below.

OurstrategyfortheWineandSpiritssegmentistobuildanindustry-leadingportfolioofhigher-endwineandspiritsbrands.Weareinvestingtomeettheevolvingneedsofconsumers,includinglaunchingdirect-to-consumerandeCommerceplatforms;buildingbrandsthroughconsumerinsights,sensoryexpertise,andinnovation;andrefreshingexistingbrands,aswecontinuetofocusonmovingourbrandedwineandspiritsportfoliotowardsahigher-margin,higher-growthportfolioofbrands.Wefocusourinnovationandinvestmentdollarsonbrandswithinourportfoliowhichpositionustobenefitfromtheconsumer-ledtrendtowardspremiumization.Additionally,inconnectionwiththerecentdivestitures,weexpecttooptimizethevalueofourwineandspiritsportfoliobydrivingincreasedfocusonourhigher-endbrandstoaccelerategrowthandimproveoveralloperatingmargins.Inmarketswhereitisfeasible,weenteredintocontractualarrangementstoconsolidateourU.S.distributionnetworkinordertoobtaindedicateddistributorsellingresourceswhichfocusonourU.S.wineandspiritsportfoliotodriveorganicgrowth.ThisconsolidatedU.S.distributionnetworkcurrentlyrepresentsabout70%ofourbrandedwineandspiritsvolumeintheU.S.EffectiveApril1,2021,wehavemodifiedourU.S.wineandspiritsdistributionnetworktoasingledistributorwhichweexpecttocontinuetorepresentapproximately70%ofthatvolume.Throughoutthetermsofthesecontracts,wegenerallyexpectshipmentsonanannualbasistothesedistributorstoessentiallyequalthedistributors’shipmentstoretailers.

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

WecomplementourstrategywithourinvestmentinCanopy,byexpandingourportfoliointoadjacentcategories.Canopyisaleadingcannabiscompanywithoperationsincountriesacrosstheworld.Thisinvestmentisconsistentwithourlong-termstrategytoidentify,address,andstayaheadofevolvingconsumertrendsandmarketdynamics.WeexpandedourstrategicrelationshipwithCanopytohelppositionitasagloballeaderincannabisproduction,branding,intellectualproperty,andretailing.

Weremaincommittedtoourlong-termfinancialmodelof:growingsales,expandingmargins,andincreasingcashflowinordertoachieveearningspersharegrowth,maintainourtargetedleverageratio,anddeliverreturnstoshareholdersthroughthepaymentofdividendsandperiodicsharerepurchases.Ourresultsofoperationsandfinancialconditionhavenotbeensignificantlyaffectedbyinflationandchangingprices.Intheeventoffuturerisingcosts,weintendtopassalongsuchrisingcoststhroughincreasedsellingprices,subjecttonormalcompetitiveconditions.Therecanbenoassurances,however,thatwewillbeabletopassalongrisingcoststhroughincreasedsellingprices.Inaddition,wecontinuetoidentifyon-goingcostsavingsinitiatives.

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RecentDevelopment

MexicaliBreweryInApril2021,ourBoardofDirectorsauthorizedmanagementtosellorabandontheMexicaliBrewery.

Subsequently,managementdeterminedthatwewillbeunabletouseorrepurposecertainassetsattheMexicaliBrewery.Accordingly,inthefirstquarteroffiscal2022,weexpecttorecognizealong-livedassetimpairmentofapproximately$650millionto$680millionwhichwillbeincludedwithinourconsolidatedresultsofoperations.ThefairvaluewillbedeterminedbasedontheexpectedsalvagevalueoftheabandonedassetsasofApril2021.WearecontinuingtoworkwithgovernmentofficialsinMexicoto(i)determinenextstepsforoursuspendedMexicaliBreweryconstructionprojectand(ii)pursuevariousformsofrecoveryforcapitalizedcostsandadditionalexpensesincurredinestablishingthebrewery,however,therecanbenoassuranceofanyrecoveries.Inthemedium-term,undernormaloperatingconditions,wehaveamplecapacityattheNavaandObregonbreweriestomeetconsumerneedsbasedoncurrentgrowthforecastsandcurrentandplannedproductioncapabilities.ToalignwithouranticipatedfuturegrowthexpectationswearealsoworkingwiththeMexicangovernmenttoexploreoptionstoaddfurthercapacityatanotherlocationinSoutheasternMexicowherethereisamplewaterandaskilledworkforcetomeetourlong-termneeds.

COVID-19

Inthekeymarketswherewesellourproducts,thebeveragealcoholindustryhasbeenclassifiedasanessentialbusiness.COVID-19containmentmeasuresaffectedusearlierinthefiscalyearprimarilyinthereductionof(i)depletionvolumeonourproductsintheon-premisebusinessduetobarandrestaurantclosuresand(ii)shipmentvolumerelatedtothereducedproductionactivityatourmajorbreweriesinMexico.Theon-premisebusinesshashistoricallybeenabout10%to15%ofourdepletionvolumeforbeer,wine,andspirits.TheFiscal2021decreaseintheon-premisebusinesshasbeenmorethanoffsetbyanincreaseinoff-premise.Weexpectouron-premisedepletionvolumestoreturntomorenormallevelsasFederalDrugAdministrationapprovedCOVID-19vaccinesareadministeredacrosstheU.S.andstatesbegintheprocessoffullyreopeningtheireconomies,includingbarsandrestaurants.

Currently,ourbreweries,wineries,andbottlingfacilitiesareopenandoperational.However,certainfacilitiesmayexperienceoccasionaltemporaryclosuresduetoapplicablelocalconditions.InJune2020,beerproductionatourmajorbreweriesinMexicoreturnedtonormallevelsfollowingaslowdownearlierinthefiscalyear.Oursupplychainsanddistributionchannelswerenotmateriallyimpactedandweworkedthroughoutthefiscalyeartorebuildoursupplyofproductstomeetforecasteddemand.DistributorproductinventoriesreturnedtonormallevelsattheendofFiscal2021.

InresponsetoCOVID-19,wehaveensuredourongoingliquidityandfinancialflexibilitythroughcashpreservationinitiatives,capitalexpensereductions,andcostcontrolmeasures.Wearenotabletoestimatethelong-termimpactofCOVID-19onourbusiness,financialcondition,resultsofoperations,and/orcashflow.Webelievewehavesufficientliquidityavailablefromoperatingcashflow,cashonhand,andavailabilityunderour$2.0billionrevolvingcreditfacility.Weexpecttohavecontinuedaccesstocapitalmarketsandtobeabletocontinuetoreturnvaluetoshareholdersthroughdividendsandperiodicsharerepurchases.

Investments,acquisitions,anddivestitures

BeersegmentBallastPointDivestitureInMarch2020,wesoldtheBallastPointcraftbeerbusiness,includinganumberofitsassociated

productionfacilitiesandbrewpubs.Accordingly,ourconsolidatedresultsofoperationsincludetheresultsofoperationsofourBallastPointcraftbeerbusinessthroughthedateofdivestiture.

WineandSpiritssegmentPaulMassonDivestitureInJanuary2021,wesoldthePaulMassonGrandeAmberBrandybrand,relatedinventory,andinterestsin

certaincontracts.Wereceivedcashproceedsof$267.4million,subjecttocertainpost-closingadjustments.The

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netcashproceedswereusedforgeneralcorporatepurposes.FortheyearendedFebruary28,2021,werecognizedanetgainof$58.9milliononthesaleofthebusiness.

WineandSpiritsDivestituresInJanuary2021,wesoldaportionofourwineandspiritsbusiness,includinglower-margin,lower-growth

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

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

ThecashproceedsfromtheWineandSpiritsDivestitureswereutilizedtorepaythe3.75%May2013SeniorNotesandforothergeneralcorporatepurposes.FortheyearendedFebruary28,2021,werecognizedanetlossof$35.7millionontheWineandSpiritsDivestitures.

ConcentrateBusinessDivestitureInDecember2020,wesoldcertainbrandsusedinourconcentratesandhigh-colorconcentratebusiness,

andcertainintellectualproperty,inventory,goodwill,interestsincertaincontracts,andassetsofourconcentratesandhigh-colorconcentratebusiness.

ThefollowingpresentsselectedfinancialinformationincludedinourhistoricalconsolidatedfinancialstatementsthatarenolongerpartofourconsolidatedresultsofoperationsfollowingthePaulMassonDivestiture,WineandSpiritsDivestitures,andConcentrateBusinessDivestiture:

Fiscal2021 Fiscal2020

(inmillions)

Netsales $ 642.3 $ 868.2

Grossprofit $ 252.9 $ 330.5

Marketing(1) $ 14.5 $ 17.8

(1) Includedinselling,general,andadministrativeexpenseswithinourconsolidatedresultsofoperations.

Copper&KingsacquisitionInSeptember2020,weacquiredtheremainingownershipinterestinCopper&Kingswhichprimarily

includedtheacquisitionofinventories,andproperty,plant,andequipment.Thisacquisitionincludedacollectionoftraditionalandcraftbatch-distilledAmericanbrandiesandotherselectspirits.TheresultsofoperationsofCopper&KingsarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

EmpathyWinesacquisitionInJune2020,weacquiredEmpathyWines,whichprimarilyincludedtheacquisitionofgoodwill,

trademarks,andinventory.Thisacquisition,whichincludedadigitally-nativewinebrand,strengthenedourpositioninthedirect-to-consumerandeCommercemarkets.TheresultsofoperationsofEmpathyWinesarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

BookerVineyardinvestmentInApril2020,weinvestedinBookerVineyard,asuper-luxury,direct-to-consumerfocusedwinebusiness

thatisaccountedforundertheequitymethod.Werecognizeourshareoftheirequityinearnings(losses)inourconsolidatedfinancialstatementsintheWineandSpiritssegment.

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BlackVelvetDivestitureInNovember2019,wesoldtheBlackVelvetCanadianWhiskybusinessandthebrand’sassociated

productionfacility,alongwithasubsetofCanadianwhiskybrandsproducedatthatfacility,andrelatedinventory.Accordingly,ourconsolidatedresultsofoperationsincludetheresultsofoperationsofourCanadianwhiskybusinessthroughthedateofdivestiture.Wereceivedcashproceedsof$266.7million,netofpost-closingadjustments.Werecognizedanetgainof$70.5milliononthesaleofthebusiness,primarilyfortheyearendedFebruary29,2020.

Nelson’sGreenBrieracquisitionInMay2019,weincreasedourownershipinterestinTennessee-basedNelson’sGreenBrierto75%,

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

CanopysegmentCanopyinvestmentInMay2020,weexercisedtheNovember2017CanopyWarrantsatanexercisepriceofC$12.98per

warrantshareforC$245.0million,or$173.9million.

Foradditionalinformationontherecentdevelopment,andtheseinvestments,acquisitions,anddivestitures,refertoNotes2,7,10,and23.

ResultsofOperations

FinancialHighlights

Referencestoorganicthroughoutthefollowingdiscussionexcludetheimpactofrecentdivestitures,asappropriate.

ForFiscal2021comparedwithFiscal2020:

• Ourresultsofoperationsbenefitedfromtheunrealizednetgainof$802.0millionfromthechangesinfairvalueofourinvestmentinCanopyinFiscal2021andimprovementswithintheBeersegment.

• Netsalesincreased3%dueto(i)anincreaseinBeernetsalesdrivenpredominantlybyvolumegrowth,(ii)favorableimpactsfrompricingandproductmixshiftwithinboththeBeerandtheWineandSpiritssegments,partiallyoffsetby(i)recentdivestitureswithinboththeBeerandtheWineandSpiritssegmentsand(ii)WineandSpiritsnetsalesledbybrandedvolumedeclinelargelyfrombrandsdivestedinJanuary2021.

• Operatingincomeincreased30%largelyduetochargesrecognizedforFiscal2020inconnectionwithourbusinesstransformationstrategywithintheWineandSpiritssegment,includinganimpairmentoflong-livedassetsheldforsaleprimarilyinconnectionwiththeWineandSpiritsDivestituresandanincreaseinBeernetsalesinFiscal2021drivenbyvolumegrowth,partiallyoffsetbyrecentdivestitures.

• NetincomeattributabletoCBIanddilutednetincomepercommonshareattributabletoCBIincreasedlargelydueto(i)theincreaseinunrealizednetgainfromthechangesinfairvalueofourinvestmentinCanopyinFiscal2021ascomparedwiththeunrealizednetlossinFiscal2020,(ii)animpairmentoflong-livedassetsheldforsaleinFiscal2020,and(iii)volumegrowthwithintheBeersegment,partiallyoffsetbyFiscal2021provisionforincometaxesascomparedwiththebenefitfromincometaxesforFiscal2020.

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ComparableAdjustments

ManagementexcludesitemsthataffectcomparabilityfromitsevaluationoftheresultsofeachoperatingsegmentastheseComparableAdjustmentsarenotreflectiveofcoreoperationsofthesegments.Segmentoperatingperformanceandtheincentivecompensationofsegmentmanagementareevaluatedbasedoncoresegmentoperatingincome(loss)whichdonotincludetheimpactoftheseComparableAdjustments.

AsmorefullydescribedhereinandintheNotes,theComparableAdjustmentsthatimpactedcomparabilityinoursegmentresultsforeachperiodareasfollows:

Costofproductsold

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

Strategicbusinessdevelopmentcosts (29.8) (124.5)

COVID-19incrementalcosts (7.6) —

Flowthroughofinventorystep-up (0.4) (1.5)

Accelerateddepreciation (0.1) (7.6)

Settlementsofundesignatedcommodityderivativecontracts 31.6 11.7

Netgain(loss)onundesignatedcommodityderivativecontracts 25.1 (49.0)

Totalcostofproductsold (51.6) (162.3)

Selling,general,andadministrativeexpenses

Restructuringandotherstrategicbusinessdevelopmentcosts (23.9) (25.3)

Netgain(loss)onforeigncurrencyderivativecontracts (8.0) (1.8)

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

Impairmentofintangibleassets (6.0) (11.0)

COVID-19incrementalcosts (4.8) —

Othergains(losses) 14.7 7.3

Totalselling,general,andadministrativeexpenses (35.6) (40.0)

Impairmentofassetsheldforsale (24.0) (449.7)

Gain(loss)onsaleofbusiness 14.2 74.1

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

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

Fiscal2021 Fiscal2020

(inmillions)

CostofproductsoldRecoveryof(losson)inventorywrite-downWerecognizedalossonthewrite-downofbulkwineinventoryandcertaingrapesasaresultofsmoke

damagesustainedduringthe2020U.S.wildfires,partiallyoffsetbyarelatedprobablerecoveryfromourinsurancecarriers(Fiscal2021),andareimbursementfromourinsurancecarriersforlossesrecognizedonthewrite-downofcertainbulkwineinventoryasaresultofsmokedamagesustainedduringthefall2017Californiawildfires(Fiscal2020).Foradditionalinformationonthe2020U.S.wildfires,refertoNote16.

StrategicbusinessdevelopmentcostsWerecognizedcostsprimarilyinconnectionwithlossesonwrite-downsofexcessinventoryandcontract

terminationsresultingfromourongoingeffortstooptimizeourportfolio,gainefficiencies,andreduceourcoststructurewithintheWineandSpiritssegment.

COVID-19incrementalcostsWerecognizedcostsforincrementalwagesandhazardpaymentstoemployees,purchasesofpersonal

protectiveequipment,morefrequentandthoroughcleaningandsanitizationofourfacilities,andcostsassociatedwiththeunusedbeerkegreimbursementprogramwithdistributors.

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Inventorystep-upInconnectionwithacquisitions,theallocationofpurchasepriceinexcessofbookvalueforcertain

inventoriesonhandatthedateofacquisitionisreferredtoasinventorystep-up.Inventorystep-uprepresentsanassumedmanufacturingprofitattributabletotheacquiredbusinesspriortoacquisition.

AccelerateddepreciationWerecognizedaccelerateddepreciationforcertainassetsprimarilyinconnectionwiththemulti-year

implementationofanewglobalERPsystemwhichisintendedtoreplaceourthen-existingoperatingandfinancialsystems.

UndesignatedcommodityderivativecontractsNetgain(loss)onundesignatedcommodityderivativecontractsrepresentsanetgain(loss)fromthe

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

Selling,general,andadministrativeexpensesRestructuringandotherstrategicbusinessdevelopmentcostsWerecognizedcostsprimarilyinconnectionwithcoststooptimizeourportfolio,gainefficiencies,and

reduceourcoststructurewithintheWineandSpiritssegment.

Netgain(loss)onforeigncurrencyderivativecontractsWerecognizedanetlossprimarilyinconnectionwiththesettlementofforeigncurrencyforward

contractsenteredintotofixtheU.S.dollarcostoftheMay2020CanopyInvestment.

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

investments,acquisitions,anddivestitures.

ImpairmentofintangibleassetsWerecognizedtrademarkimpairmentlossesrelatedtoourBeersegment’sFourCornerscraftbeer

trademarkasset(Fiscal2021)andBallastPointcraftbeertrademarkasset(Fiscal2020).Foradditionalinformation,refertoNote7.

COVID-19incrementalcostsWerecognizedcostsforpaymentstothird-partygeneralcontractorstomaintaintheirworkforcefor

expansionactivitiesattheObregonBreweryandrecognizedcostsforincrementalwagesandhazardpaymentstoemployees.

Othergains(losses)Werecognizedothergains(losses)primarilyinconnectionwith(i)againrecognizedonthesaleofa

vineyard(Fiscal2021),(ii)againontheremeasurementofourpreviouslyheldequityinterestinNelson’sGreenBriertotheacquisition-datefairvalue(Fiscal2020),(iii)anincreaseinestimatedfairvalueofacontingentliabilityassociatedwithapriorperiodacquisition(Fiscal2020),and(iv)recognitionofpreviouslydeferredgainuponreleaseofarelatedguarantee(Fiscal2020).

ImpairmentofassetsheldforsaleWerecognizedimpairmentsoflong-livedassetsheldforsaleinconnectionwiththe(i)WineandSpirits

Divestitures(Fiscal2021,Fiscal2020),(ii)theConcentrateBusinessDivestiture(Fiscal2021,Fiscal2020),and(iii)theBallastPointDivestiture(Fiscal2020).Foradditionalinformation,refertoNote7.

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Gain(loss)onsaleofbusinessWerecognizedanetgain(loss)primarilyonthecompletionofthePaulMassonDivestiture,theWineand

SpiritsDivestitures(Fiscal2021),andtheBlackVelvetDivestiture(Fiscal2020).

Income(loss)fromunconsolidatedinvestmentsWerecognizedanunrealizedgain(loss)primarilyfrom(i)thechangesinfairvalueofoursecurities

measuredatfairvalue,(ii)equityinearnings(losses)fromCanopy’sresultsofoperations,(iii)equitylossesfromCanopyrelatedtocostsdesignedtoimprovetheirorganizationalfocus,streamlineoperations,andalignproductioncapabilitywithprojecteddemand(Fiscal2021),and(iv)theincreaseinfairvalueresultingfromtheJune2019modificationofthetermsoftheNovember2018CanopyWarrants(Fiscal2020).Foradditionalinformation,refertoNotes7and10.

Businesssegments

Netsales

Fiscal2021 Fiscal2020DollarChange

PercentChange

(inmillions)

Beer $ 6,074.6 $ 5,615.9 $ 458.7 8%

WineandSpirits:

Wine 2,208.4 2,367.5 (159.1) (7%)

Spirits 331.9 360.1 (28.2) (8%)

TotalWineandSpirits 2,540.3 2,727.6 (187.3) (7%)

Canopy 378.6 290.2 88.4 30%

ConsolidationandEliminations (378.6) (290.2) (88.4) (30%)

Consolidatednetsales $ 8,614.9 $ 8,343.5 $ 271.4 3%

Beersegment


PercentChange

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

Netsales $ 6,074.6 $ 5,615.9 $ 458.7 8%

Shipmentvolume

Total 334.6 311.9 7.3%

Organic(1) 334.6 309.4 8.1%

Depletionvolume(1)(2) 7.1%(1) IncludesanadjustmenttoremovevolumeassociatedwiththeBallastPointDivestiturefortheperiodMarch2,

2019,throughFebruary29,2020.(2) Depletionsrepresentdistributorshipmentsofourrespectivebrandedproductstoretailcustomers,basedon

third-partydata.

TheincreaseinBeernetsalesislargelydueto$451.6millionofvolumegrowthwithinourMexicanbeerportfolio,whichbenefitedfromcontinuedconsumerdemand,newproductintroductions,andlineextensions,$69.7millionfavorableimpactfrompricinginselectmarketswithinourMexicanbeerportfolio,and$35.0millionincreasefromfavorableproductmixshift,partiallyoffsetby$92.0millionfromtheBallastPointDivestiture.FavorableproductmixshiftprimarilyresultedfromincreasedsalesofCoronaHardSeltzerandareductioninon-premisekegsales.InventoryinourdistributionchannelsreturnedtonormallevelsbytheendofFiscal2021followingreducedproductionlevelsatourmajorbreweriesinMexicoearlierintheyear.

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WineandSpiritssegment


PercentChange

(inmillions,brandedproduct,9-litercaseequivalents)

Netsales $ 2,540.3 $ 2,727.6 $ (187.3) (7%)

Shipmentvolume

Total 45.0 53.6 (16.0%)

Organic(3)(4)(5) 45.0 47.3 (4.9%)

U.S.Domestic 41.5 49.5 (16.2%)

OrganicU.S.Domestic(3)(4)(5) 41.5 43.4 (4.4%)

U.S.Domesticdepletionvolume(2)(3)(4)(5) (2.8%)

(3) IncludesanadjustmenttoremovevolumeassociatedwiththeBlackVelvetDivestiturefortheperiodMarch1,2019,throughOctober31,2019.

(4) IncludesanadjustmenttoremovevolumeassociatedwiththeWineandSpiritsDivestituresfortheperiodJanuary5,2020,throughFebruary29,2020.

(5) IncludesanadjustmenttoremovevolumeassociatedwiththePaulMassonDivestiturefortheperiodJanuary12,2020,throughFebruary29,2020.

ThedecreaseinWineandSpiritsnetsalesisprimarilydueto$230.9millionfromrecentdivestituresand$96.4milliondeclineinbrandedwineandspiritsvolume,drivenbythebrandsdivestedinJanuary2021,partiallyoffsetby$102.5millionoffavorableproductmixshiftand$51.1millionfromfavorablepricing.TheWineandSpiritsFiscal2021resultshavebeennegativelyimpactedby(i)recentdivestitures,(ii)on-premiseandretailtastingroomclosuresasaresultofCOVID-19containmentmeasures,and(iii)transitionactivitieswithdistributorsrepositioningforownershipofbrands,partiallyoffsetbyanincreaseinoff-premiseandacontinuedfocusonNPDandgrowingourbrands.

Canopysegment

OurownershipinterestinCanopyallowsustoexercisesignificantinfluence,butnotcontrol,and,therefore,weaccountforourinvestmentinCanopyundertheequitymethod.AmountsincludedfortheCanopysegmentrepresent100%ofCanopy’sreportedresultsonatwo-monthlag.Accordingly,werecognizedourshareofCanopy’searnings(losses)fromJanuarythroughDecember2020,inourFiscal2021resultsandJanuarythroughDecember2019,inourFiscal2020results.Althoughweownlessthan100%oftheoutstandingsharesofCanopy,100%oftheCanopyresultsareincludedandsubsequentlyeliminatedtoreconciletoourconsolidatedfinancialstatements.See“Income(loss)fromunconsolidatedinvestments”belowforadiscussionofCanopy’snetsales,grossprofit(loss),selling,general,andadministrativeexpenses,andoperatingincome(loss).

Grossprofit


PercentChange

(inmillions)

Beer $ 3,402.4 $ 3,125.2 $ 277.2 9%

WineandSpirits 1,115.2 1,189.0 (73.8) (6%)

Canopy (14.1) 45.4 (59.5) NM

ConsolidationandEliminations 14.1 (45.4) 59.5 NM

ComparableAdjustments (51.6) (162.3) 110.7 68%

Consolidatedgrossprofit $ 4,466.0 $ 4,151.9 $ 314.1 8%

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TheincreaseinBeerisprimarilydueto$259.3millionofvolumegrowthandthe$69.7millionfavorableimpactfrompricing,partiallyoffsetby$19.9millionofhighercostofproductsold,$18.5milliondecreaseingrossprofitduetotheBallastPointDivestiture,and$9.4millionofunfavorableproductmixshift.Thehighercostofproductsoldislargelydueto$39.6millionincreasedoperationalcostsand$3.8millionincreasedlogisticscosts,partiallyoffsetby$23.5millionofforeigncurrencytransactionalbenefits.Theincreaseinoperationalcostsprimarilyconsistedof(i)$32.3millionofhighermaterialcosts,largelyattributabletoglass,and(ii)$15.7millionofinflationandincreasedbrewerycompensationandbenefits,partiallyoffsetby$20.4millionoffavorablefixedcostabsorptionrelatedtoincreasedproductioninFiscal2021.Theincreaseinlogisticscostsprimarilyconsistedof$14.5millionincreasedtransportationcosts,partiallyoffsetby$11.8millionofdecreasedobsolescencedrivenbylowerinventorylevelsaswereplenishedourdistributionchannels.UnfavorableproductmixshiftprimarilyresultedfromincreasedsalesofCoronaHardSeltzer,partiallyoffsetbyareductioninon-premisekegsales.

ThedecreaseinWineandSpiritsislargelyduetoadecreaseof$90.0millioningrossprofitduetotherecentdivestitures,$66.5millionhighercostofproductsold,and$33.1millionofdeclineinbrandedwineandspiritsvolume,drivenbythebrandsdivestedinJanuary2021,partiallyoffsetby$71.5millionoffavorableproductmixshiftandthe$51.1millionfromfavorablepricing.Highercostofproductsoldwaslargelyattributabletounfavorablefixedcostabsorptionincluding$28.6millionfromdecreasedproductionlevelsatcertainfacilitiesinthesecondhalfoffiscal2021asaresultofthe2020U.S.wildfires,certainspiritspackagingsizeobsolescence,increasedwinerycompensationandbenefits,aswellasincreasedpackagingcosts,includingglassandlabels,partiallyoffsetbylowergraperawmaterialcosts.

Grossprofitasapercentofnetsalesincreasedto51.8%forFiscal2021comparedwith49.8%forFiscal2020.Thiswaslargelydueto(i)afavorablechangeofapproximately130basispointsinComparableAdjustments,(ii)favorableimpactsfrombothBeerandWineandSpiritspricinginselectmarkets,whichcontributedapproximately40basispointsand30basispointsofrategrowth,respectively,and(iii)30basispointsoffavorableimpactfromtherecentdivestitures,partiallyoffsetbyapproximately80basispointsofratedeclinefromhighercostofproductsoldwithintheWineandSpiritssegmentandanunfavorableproductmixshiftfortheBeersegmentcontributingapproximately30basispointsofratedecline.



PercentChange

(inmillions)Beer $ 908.1 $ 877.3 $ 30.8 4%WineandSpirits 492.8 480.6 12.2 3%CorporateOperationsandOther 228.6 223.9 4.7 2%Canopy 1,481.9 731.2 750.7 NMConsolidationandEliminations (1,481.9) (731.2) (750.7) NMComparableAdjustments 35.6 40.0 (4.4) (11%)

Consolidatedselling,general,andadministrativeexpenses $ 1,665.1 $ 1,621.8 $ 43.3 3%

TheincreaseinBeerisprimarilyduetoanincreaseof$26.9millioninmarketingspendthatwaslargelydrivenbyincreasedadvertisingresultingfromplannedinvestmentstosupportthegrowthofourMexicanbeerportfoliopredominantlyinthefourthquarterofFiscal2021.

TheincreaseinWineandSpiritsisprimarilyduetoanincreaseof$8.6millioninmarketingspendthatwaslargelydrivenbyanincreasedfocusoneCommerceanddigitalmarketingplacementforourhigher-end,higher-marginbrandsanda$5.9millionincreaseingeneralandadministrativeexpenses.Theincreaseingeneralandadministrativeexpensesisdrivenbyincreasedcompensationandbenefits,partiallyoffsetbyafavorableimpactfromreducedtraveldrivenbyCOVID-19containmentmeasuresandcertaincostsavinginitiatives.

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TheincreaseinCorporateOperationsandOtherislargelyduetoapproximatelya$15millionincreaseincompensationandbenefits,$6millionofunfavorableforeigncurrencylosses,andanincreaseof$2millionincharitablecontributions,primarilydrivenbyCOVID-19supportefforts,partiallyoffsetbydecreasedinsurancerelatedcostsof$17millionand$6millionoffavorableimpactfromreducedtraveldrivenbyCOVID-19containmentmeasures.

Selling,general,andadministrativeexpensesasapercentofnetsalesdecreasedto19.3%forFiscal2021ascomparedwith19.4%forFiscal2020.Thedecreaseisdrivenlargelybyapproximately490basispointsofratedeclineastheincreaseinBeernetsalesexceededtheincreaseinselling,general,andadministrativeexpenses,andapproximately40basispointsinComparableAdjustmentsratedecline,largelyoffsetbyapproximately470basispointsofrategrowthfromtherecentWineandSpiritsdivestituresandanincreaseinCorporateOperationsandOthergeneralandadministrativeexpenses,whichresultedin45basispointsofrategrowth.

Operatingincome(loss)


PercentChange

(inmillions)

Beer $ 2,494.3 $ 2,247.9 $ 246.4 11%

WineandSpirits 622.4 708.4 (86.0) (12%)

CorporateOperationsandOther (228.6) (223.9) (4.7) (2%)

Canopy (1,496.0) (685.8) (810.2) NM

ConsolidationandEliminations 1,496.0 685.8 810.2 NM

ComparableAdjustments (97.0) (577.9) 480.9 83%

Consolidatedoperatingincome(loss) $ 2,791.1 $ 2,154.5 $ 636.6 30%

TheincreaseinBeerisprimarilyattributabletothestrongvolumegrowthwithinourMexicanbeerportfolioandfavorablepricingimpact,partiallyoffsetbytheincreasedmarketingspendandhighercostofproductsold.

ThedecreaseinWineandSpiritswasdrivenlargelybytherecentdivestitures,thehighercostofproductsold,andthedeclineinbrandedwineandspiritsvolume,partiallyoffsetbyfavorableimpactsfromproductmixshiftandpricing.

Aspreviouslydiscussed,theCorporateOperationsandOtherincreaseinoperatinglossisduelargelytotheincreaseincompensationandbenefits,unfavorableforeigncurrencylosses,andincreasedcharitablecontributions,partiallyoffsetbydecreasedinsurancerelatedcostsandthefavorableimpactfromreducedtravel.

Income(loss)fromunconsolidatedinvestmentsGeneral


PercentChange

(inmillions)

Unrealizednetgain(loss)onsecuritiesmeasuredatfairvalue(1) $ 802.0 $ (2,126.4) $ 2,928.4 138%

Equityinearnings(losses)fromCanopyandrelatedactivities(2) (679.0) (575.9) (103.1) (18)%

Equityinearnings(losses)fromotherequitymethodinvestees 27.3 33.3 (6.0) (18%)

Netgain(loss)onsaleofunconsolidatedinvestment — 0.4 (0.4) NM

$ 150.3 $ (2,668.6) $ 2,818.9 106%

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(1)Fiscal2020includesanunrealizednetlossfromthechangesinfairvalueofoursecuritiesmeasuredatfairvalueof$3,302.4million,partiallyoffsetbyan$1,176.0millionunrealizedgainresultingfromtheJune2019WarrantModification.

(2)Fiscal2021includes$359.6millionofcostsdesignedtoimprovetheirorganizationalfocus,streamlineoperations,andalignproductioncapabilitywithprojecteddemandandFiscal2020includesourshareofCanopy’sadditionallossresultingfromtheJune2019WarrantModificationof$409.0million.

Canopysegment

Canopynetsalesincreasedto$378.6millionforFiscal2021from$290.2millionforFiscal2020.Thisincreaseof$88.4million,or30%isprimarilyattributabletoanincreaseinotherproductofferingsalesandinternationalmedicalsales,aswellasadditionalCanadianrecreationalsales.Theincreaseinothersalesresultedfrom(i)theexpansionoftheirU.S.distributionnetworkforvaporizerssoldbyStorz&BickelGmbH&Co.KG,(ii)beauty,skincare,wellness,andsleepproductsalesfromtheirMay2019acquisitionofThisWorksProductsLimited,and(iii)salesofsportsnutritionbeverages,mixes,protein,gum,andmintsfromtheirOctober2019acquisitionofBioSteel.TheincreaseininternationalmedicalsaleslargelyresultedfromCanopy’sApril2019acquisitionofC3.CanadianrecreationalsalesbenefitedfromtheintroductionsofretailstoresacrossCanadaandcannabis-infusedbeverages.Canopygrossprofit(loss)decreasedto$(14.1)millionforFiscal2021from$45.4millionforFiscal2020.Thisdecreaseof$59.5millionisprimarilydrivenbyinventorywrite-downsrelatedtoitsorganizationalandstrategicreviewoftheirbusinessanddetailedevaluationofinventory.Canopyselling,general,andadministrativeexpensesincreased$750.7millionprimarilyfrom(i)theirdecisiontoclosegreenhousefacilitiesaswellasotherchangesrelatedtoitsorganizationalandstrategicreviewoftheirbusinessand(ii)expectedcreditlossesonfinancialassetsandrelatedcharges,partiallyoffsetbyareductioninstock-basedcompensationexpense.Thecombinationofthesefactorswerethemaincontributorstotheincreaseinoperatinglossof$810.2million.

InterestexpenseInterestexpensedecreasedto$385.7millionforFiscal2021from$428.7millionforFiscal2020.This

decreaseof$43.0million,or10%ispredominantlyduetoloweraverageborrowingsofapproximately$1.2billionprimarilyattributabletothepartialrepaymentoffinancingenteredintoinconnectionwiththeNovember2018CanopyTransaction.

(Provisionfor)benefitfromincometaxesOureffectivetaxrateforFiscal2021was20.1%oftaxexpenseascomparedwith102.3%oftaxbenefitfor

Fiscal2020.Incomparisontoprioryear,ourtaxeswerenegativelyimpactedprimarilyby:

• therecognitionofa$547.4millionnetincometaxbenefitresultingfromtheremeasurementofourdeferredtaxassetsforFiscal2020inconnectionwiththeSeptember2019enactmentoftaxreforminSwitzerland,

• lowernetincometaxbenefitsrecordedforFiscal2021ascomparedwithFiscal2020onthechangesinfairvalueofourinvestmentinCanopyandCanopyequityinearnings(losses);and

• alowernetincometaxbenefitfromstock-basedcompensationawardactivityforFiscal2021fromchangesinoptionexerciseactivity.

Foradditionalinformation,refertoNote13.

Weexpectourreportedeffectivetaxrateforthenextfiscalyeartobeintherangeof21%to23%.Thisrangeincludestheestimatedimpactoftheexpectedlong-livedassetimpairmentofbreweryconstructioninprogress.Foradditionalinformation,refertoNote23.Sinceestimatesarenotcurrentlyavailable,thisrangedoesnotreflectanyfuturechangesinthefairvalueofourCanopyinvestmentmeasuredatfairvalueandanyfutureequityinearnings(losses)andrelatedactivitiesfromtheCanopyEquityMethodInvestment.

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Netincome(loss)attributabletoCBINetincome(loss)attributabletoCBIincreasedto$1,998.0millionforFiscal2021from$(11.8)millionfor

Fiscal2020.Thisincreaseof$2,009.8millionislargelyattributableto(i)theunrealizednetgainfromthechangesinfairvalueofourinvestmentinCanopyinFiscal2021ascomparedwithanunrealizednetlossinFiscal2020,(ii)animpairmentoflong-livedassetsheldforsaleforFiscal2020,(iii)andstrongvolumegrowthwithintheBeersegment,partiallyoffsetbytheFiscal2021provisionforincometaxesascomparedwithabenefitfromincometaxesforFiscal2020.

LiquidityandCapitalResources

General

Ourprimarysourceofliquidityhasbeencashflowfromoperatingactivities.Ourabilitytoconsistentlygeneraterobustcashflowfromouroperationsisoneofourmostsignificantfinancialstrengths,itenablesustoinvestinourpeopleandbrands,makecapitalinvestmentsandstrategicacquisitions,provideacashdividendprogram,andfromtime-to-time,repurchasesharesofourcommonstock.Ourlargestuseofcashinouroperationsisforpurchasingandcarryinginventoriesandcarryingseasonalaccountsreceivable.Historically,wehaveusedthiscashflowtorepayourshort-termborrowingsandfundcapitalexpenditures.Additionally,ourcommercialpaperprogramisusedtofundourshort-termborrowingrequirementsandtomaintainouraccesstothecapitalmarkets.Weuseourshort-termborrowings,includingourcommercialpaperprogram,tosupportourworkingcapitalrequirementsandcapitalexpenditures.COVID-19hasnegativelyimpactedtheglobaleconomyandfinancialmarkets.Aprolongedimpactcouldinterferewithourabilitytoaccesssourcesofliquidityoratfavorableratesandtogeneratesufficientoperatingcashflows.WealsohaveusedopportunitiestodefersomepaymentsincludingcertainpayrolltaxesundertheCARESActaffordedtousduringthepandemic.

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

OnMay1,2020,weexercisedtheNovember2017CanopyWarrantsforanaggregateamountofC$245.0million,or$173.9millionwithcashfromoperations.

Cashflows


(inmillions)

Netcashprovidedby(usedin):

Operatingactivities $ 2,806.5 $ 2,551.1 $ 255.4

Investingactivities (87.9) (531.0) 443.1

Financingactivities (2,346.6) (2,031.4) (315.2)

Effectofexchangeratechangesoncashandcashequivalents 7.2 (0.9) 8.1

Netincrease(decrease)incashandcashequivalents $ 379.2 $ (12.2) $ 391.4

OperatingactivitiesTheincreaseinnetcashprovidedbyoperatingactivitiesforFiscal2021islargelyduetostrongcashflow

fromtheBeersegmentdrivenprimarilybythesegment’ssolidoperatingresults,combinedwiththetimingofcollectionsforrecoverablevalue-addedtaxes.NetcashprovidedbyoperatingactivitiesalsobenefitedfromreducedinventoriesfortheWineandSpiritssegmentasaresultofthe2020U.S.wildfires.Theincreaseinnet

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cashprovidedbyoperatingactivitieswaspartiallyoffsetbyhigherincometaxpaymentsinFiscal2021primarilyduetoachangeinestimatedtaxableincomeandthereceiptofafederaltaxrefundinFiscal2020.

InvestingactivitiesNetcashusedininvestingactivitiesforFiscal2021decreasedprimarilyduetohigherproceedsfromsale

ofbusinessof$729.8millionforFiscal2021ascomparedwithFiscal2020.ThedecreasewaspartiallyoffsetbytheMay2020exerciseoftheNovember2017CanopyWarrantsfor$173.9millionandhigherFiscal2021capitalexpendituresof$138.1million.

Businessinvestments,acquisitions,anddivestituresconsistprimarilyofthefollowing:

Investments Acquisitions Divestitures

Fiscal2021

●May2020CanopyInvestment ●Copper&Kings ●PaulMassonGrandeAmberBrandy

●BookerVineyard ●EmpathyWines ●WineandSpiritsDivestiture

●NobiloWine

●Concentratesandhigh-colorconcentrates

●BallastPoint

Fiscal2020

●Nelson’sGreenBrier ●BlackVelvetCanadianWhisky

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

FinancingactivitiesTheincreaseinnetcashprovidedby(usedin)financingactivitiesconsistsof:


(inmillions)Netproceedsfrom(paymentsof)debt,currentandlong-term,andrelatedactivities $ (1,787.8) $ (1,464.8) $ (323.0)Dividendspaid (575.0) (569.2) (5.8)Purchasesoftreasurystock — (50.0) 50.0Netcashprovidedbystock-basedcompensationactivities 51.2 63.9 (12.7)Distributionstononcontrollinginterests (35.0) — (35.0)Paymentofcontingentconsideration — (11.3) 11.3

Netcashprovidedby(usedin)financingactivities $ (2,346.6) $ (2,031.4) $ (315.2)

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Debt

TotaldebtoutstandingasofFebruary28,2021,amountedto$10,442.3million,adecreaseof$1,742.3millionfromFebruary29,2020.Thisdecreaseconsistedof:

$(in

millions)

$12,184.6

$(816.7)

$(698.7)

$(647.9)

$(499.2)$(238.9) $(24.8)

$594.3

$589.6 $10,442.3

Feb29,2020

2020TermCredit

Agreement

2.25%November

2017SeniorNotes

SeniorFloatingRateNotes

3.75%May2013SeniorNotes

Commercialpaper

Other 2.875%April2020SeniorNotes

3.75%April2020SeniorNotes

Feb28,2021

9,000

10,000

11,000

12,000

13,000

Debtrepayment Debtissuance

BankfacilitiesInMarch2020,weenteredintothe2020RestatementAgreementthatamendedandrestatedthe2018

CreditAgreement.Thisresultedin(i)theremovalofthesubsidiaryguaranteesandterminationoftheguaranteeagreement,(ii)theinclusionoftheparentguarantyprovisionsinconnectionwiththeterminationoftheguaranteeagreement,(iii)theremovalofcertainprovisionspertainingtotermloanssincenotermloansareoutstanding,and(iv)therevisionoftheLIBORsuccessorrateprovisionstopermittheuseofratesbasedontheSOFRadministeredbytheFederalReserveBankofNewYork.

InMarch2020,weenteredintotheTermLoanRestatementAgreementandthe2020TermLoanRestatementAgreement,thatamendedandrestatedtheTermCreditAgreementandthe2019TermCreditAgreement,respectively.Thesenewagreementseachresultedin(i)theremovalofthesubsidiaryguaranteesandterminationoftherespectiveguaranteeagreementsand(ii)therevisionoftheLIBORsuccessorrateprovisionsineachtopermittheuseofratesbasedonSOFR.WeprepaidtheremainingoutstandingThree-YearTermFacilityandFive-YearTermFacilityborrowingsunderour2020TermCreditAgreementinFiscal2021.

SeniornotesInApril2020,weissuedtheApril2020SeniorNotes.Proceedsfromthisoffering,netofdiscountanddebt

issuancecosts,of$1,183.3millionwereprimarilyusedfortherepaymentofour2.25%November2017SeniorNotesandaportionoftheThree-YearTermFacilityoutstandingobligationsunderour2020TermCreditAgreement.

InNovember2020,werepaidtheSeniorFloatingRateNoteswithcashonhand.InFebruary2021,werepaidthe3.75%May2013SeniorNotesutilizingcashproceedsfromtheWineandSpiritsDivestitures.

GeneralThemajorityofouroutstandingborrowingsasofFebruary28,2021,consistedoffixed-ratesenior

unsecurednotes,withmaturitiesrangingfromcalendar2022tocalendar2050,andavariable-ratesenior

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unsecuredtermloanfacilityunderourMarch2020TermCreditAgreement,originallyenteredintoinJune2019,withacalendar2024maturitydateasfollows:

CalendarYearDebtMaturities

$(in

millions)

March2020TermCreditAgreement SeniorNotes

2022 2023 2024 2025 2026 2027 2028 2029 2030 2047 2048 20500

250

500

750

1,000

1,250

1,500

1,750

Additionally,wehaveacommercialpaperprogramwhichprovidesfortheissuanceofuptoanaggregateprincipalamountof$2.0billionofcommercialpaper.Ourcommercialpaperprogramisbackedbyunusedcommitmentsunderourrevolvingcreditfacilityunderour2020CreditAgreement.Accordingly,outstandingborrowingsunderourcommercialpaperprogramreducetheamountavailableunderourrevolvingcreditfacilityunderour2020CreditAgreement.

Wedonothavepurchasecommitmentsfrombuyersforourcommercialpaperand,therefore,ourabilitytoissuecommercialpaperissubjecttomarketdemand.Ifthecommercialpapermarketisnotavailabletousforanyreasonwhencommercialpaperborrowingsmature,wewillutilizeunusedcommitmentsunderourrevolvingcreditfacilityunderour2020CreditAgreementtorepaycommercialpaperborrowings.Wedonotexpectthatfluctuationsindemandforcommercialpaperwillaffectourliquiditygivenourborrowingcapacityavailableunderourrevolvingcreditfacilityunderour2020CreditAgreement.

Wehadthefollowingborrowingcapacityavailableunderour2020CreditAgreement:

RemainingBorrowingCapacity

February28,2021

April14,2021

(inmillions)

Revolvingcreditfacility(1) $ 1,988.3 $ 1,988.4

(1) Netofoutstandingrevolvingcreditfacilityborrowingsandoutstandinglettersofcreditunderour2020CreditAgreementandoutstandingborrowingsunderourcommercialpaperprogram.

Thefinancialinstitutionsparticipatinginour2020CreditAgreementhavecompliedwithpriorfundingrequestsandwebelievetheywillcomplywithanyfuturefundingrequests.However,therecanbenoassurancesthatanyparticularfinancialinstitutionwillcontinuetodoso.

Weandoursubsidiariesaresubjecttocovenantsthatarecontainedinour2020CreditAgreement,includingthoserestrictingtheincurrenceofadditionalindebtedness,additionalliens,mergersandconsolidations,transactionswithaffiliates,andsaleandleasebacktransactions,ineachcasesubjecttonumerousconditions,exceptions,andthresholds.Thefinancialcovenantsarelimitedtoaminimuminterestcoverageratioanda

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maximumnetleverageratio,bothasdefinedinour2020CreditAgreement.AsofFebruary28,2021,underour2020CreditAgreement,theminimuminterestcoverageratiowas2.5xandthemaximumnetleverageratiowas4.5x.

Therepresentations,warranties,covenants,andeventsofdefaultsetforthinourMarch2020TermCreditAgreementaresubstantiallysimilartothosesetforthinour2020CreditAgreement.

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

AsofFebruary28,2021,wewereincompliancewithourcovenantsunderour2020CreditAgreement,ourMarch2020TermCreditAgreement,andourindentures,andhavemetalldebtpaymentobligations.

Forfurtherdiscussionandpresentationofourborrowingsandavailablesourcesofborrowing,refertoNote12.

Commonstockdividends

OnApril7,2021,ourBoardofDirectorsdeclaredaquarterlycashdividendof$0.76pershareofClassACommonStock,$0.69pershareofClassBConvertibleCommonStock,and$0.69pershareofClass1CommonStockpayableonMay18,2021,tostockholdersofrecordofeachclassonMay4,2021.Weexpecttoreturnapproximately$580milliontostockholdersinFiscal2022throughcashdividends.

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

ShareRepurchaseProgram

OurBoardofDirectorshasauthorizedtherepurchaseofupto$3.0billionofourClassACommonStockandClassBConvertibleCommonStockunderthe2018Authorizationandtherepurchaseofupto$2.0billionofourClassACommonStockandClassBConvertibleCommonStockunderthe2021Authorization.Sharesrepurchasedunderthe2018Authorizationhavebecometreasuryshares.Noshareswererepurchasedduringthefourthquarteroffiscal2021.

AsofFebruary28,2021,totalsharesrepurchasedunderthe2018Authorizationandthe2021Authorizationareasfollows:

ClassACommonShares

RepurchaseAuthorization

DollarValueofShares

Repurchased

NumberofShares

Repurchased

(inmillions,exceptsharedata)

2018Authorization $ 3,000.0 $ 1,045.9 4,897,605

2021Authorization $ 2,000.0 $ — —

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

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

Foradditionalinformation,refertoNote17.

CapitalResources

Wehavemaintainedadequateliquiditytomeetworkingcapitalrequirements,fundcapitalexpenditures,andrepayscheduledprincipalandinterestpaymentsondebt.Absentdeteriorationofmarketconditions,webelievethatcashflowsfromoperatingactivitiesandfinancingactivities,primarilyshort-termborrowings,willprovideadequateresourcestosatisfyourworkingcapital,scheduledprincipalandinterestpaymentsondebt,anticipateddividendpayments,periodicsharerepurchases,andanticipatedcapitalexpenditurerequirementsforbothourshort-termandlong-termcapitalneeds.AsofFebruary28,2021,our$460.6millioncashandcashequivalentbalancereflectstherecentsaleofaportionofourwineandspiritsbusiness.

ThefollowingsetsforthinformationaboutouroutstandingobligationsatFebruary28,2021.Foradetaileddiscussionoftheitemsnotedinthefollowingtable,refertoNotes11,12,13,14,15,and16.

Contractualobligations:Long-termdebt(excludingunamortizeddebtissuancecostsandunamortizeddiscounts) $ 29.2 $ 10,490.7 $ 10,519.9Interestpaymentsonlong-termdebt(1) $ 386.7 $ 3,707.6 $ 4,094.3Operatingleases $ 84.6 $ 574.7 $ 659.3Otherlong-termliabilities(2) $ 49.0 $ 207.7 $ 256.7Purchaseobligations

Rawmaterialsandsupplies $ 994.0 $ 3,069.8 $ 4,063.8Contractservices $ 189.1 $ 627.4 $ 816.5Capitalexpenditures(3) $ 140.0 $ 103.7 $ 243.7In-processinventories $ 30.9 $ 44.4 $ 75.3Otherpurchaseobligations $ 8.4 $ 18.0 $ 26.4

Other:Returnvaluetoshareholders(4) $ 580.0 $ 3,225.8 $ 3,805.8Investmentsinbusinesses(5) $ 2.0 $ 165.3 $ 167.3

Short-termpayments

Long-termpayments Total

(inmillions)

(1) Interestpaymentsonlong-termdebtdonotincludeinterestrelatedtofinanceleaseobligationsasamountsarenotmaterial.

(2) Otherlong-termliabilitiesdonotincludepaymentsforunrecognizedtaxbenefitliabilitiesof$204.7millionduetotheuncertaintyofthetimingoffuturecashflowsassociatedwiththeseunrecognizedtaxbenefitliabilities.Inaddition,otherlong-termliabilitiesdonotincludeexpectedpaymentsforinterestandpenaltiesassociatedwithunrecognizedtaxbenefitliabilitiesasamountsarenotmaterial.Foradetaileddiscussionoftheseitems,refertoNote13.

(3) ContractstopurchaseequipmentandservicesprimarilyrelatedtotheObregonBreweryexpansion.Forfurtherinformationaboutthesepurchaseobligations,referto“CapitalExpenditures”below.

(4) Publiclyannouncedintenttoreturn$5billioninvaluetoshareholdersthroughdividendsandsharerepurchasestobemadefromFiscal2020throughFiscal2023.Wehavereturned$1,194.2millionthroughFiscal2021.

(5) Publiclyannouncedintenttoinvest(i)$100millioninfemale-foundedorledcompaniesthroughourFocusonFemaleFoundersprogramoveraten-yearperiodconcludinginfiscal2029and(ii)$100milliontosupportAfricanAmerican/Blackandminority-ownedstartupsinthebeveragealcoholspaceandrelatedcategoriesoveraten-yearperiodconcludinginfiscal2031.Wehaveinvested$32.7millionthroughFiscal2021infemale-foundedorledcompanies.

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Capitalexpenditures

DuringFiscal2021,weincurred$864.6millionforcapitalexpenditures,including$693.9millionfortheBeersegmentprimarilyfortheMexicoBeerProjects.

Weplantospendfrom$1.0billionto$1.1billionforcapitalexpendituresinFiscal2022,includingapproximately$900millionfortheBeersegmentassociatedprimarilywiththeMexicoBeerProjects.TheremainingplannedFiscal2022capitalexpendituresconsistofimprovementstoexistingoperatingfacilitiesandreplacementsofexistingequipmentand/orbuildings.TheMexicoBeerProjectsareexpectedtobecompletedbyFiscal2025.Accordingly,weexpecttospendapproximately$700millionto$900millionannuallyinFiscal2023throughFiscal2025fortheBeersegment.Managementreviewsthecapitalexpenditureprogramperiodicallyandmodifiesitasrequiredtomeetcurrentbusinessneeds.

Fiscal2021MexicoBeerProjectsSpend

NavaBrewery21%

Glassproductionplant4%

ObregonBrewery76%

Infiscal2017,webeganconstructionoftheMexicaliBrewery.InMarch2020,apublicconsultationwasheldontheconstructionofourMexicaliBrewery.Followingthenegativeresultofthepublicconsultation,weareindiscussionswithgovernmentofficialsinMexicoregardingnextstepsforourbreweryconstructionprojectandoptionselsewhereinthecountry.Weintendtocontinueworkingwithgovernmentofficialstomutuallyagreeuponapathforward.Atthistime,wehavesuspendedallMexicaliBreweryconstructionactivities.SeeNote23forfurtherdiscussion.

Criticalaccountingpoliciesandestimates

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

• Fairvalueoffinancialinstruments.Management’sestimateoffairvaluerequiressignificantjudgmentandissubjecttoahighdegreeofvariabilitybaseduponmarketconditionsandtheavailabilityofspecificinformation.Thefairvaluesofourfinancialinstrumentsthatrequiretheapplicationofsignificantjudgmentbymanagementareasfollows:

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

Debtsecurities,Convertible–estimatedusingabinomiallatticeoption-pricingmodel(Level2fairvaluemeasurement),whichincludesanestimateofthecreditspreadbasedonmarketspreadsusingbonddataasofthevaluationdate.Thisvaluationmodelusesvariousmarket-basedinputs,

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includingstockprice,remainingterm,expectedvolatility,risk-freeinterestrate,andexpecteddividendyield,asapplicable.

• Goodwillandotherintangibleassets.Goodwillandotherintangibleassetsareclassifiedintothreecategories:(i)goodwill,(ii)intangibleassetswithdefinitelivessubjecttoamortization,and(iii)intangibleassetswithindefinitelivesnotsubjecttoamortization.Inestimatingthefairvalueofthereportingunits,managementmustmakeassumptionsandprojectionsregardingitemssuchasfuturecashflows,revenues,earnings,andotherfactors.Theassumptionsusedreflectmanagement’sestimatesandarebasedonhistoricaltrends,projectionsandassumptions,includingexpectationsoffutureeconomicandcompetitiveconditionsthatareusedincurrentstrategicoperatingplans,however,aresubjecttochangeasaresultofchangingmarketconditions.Iftheseestimatesortheirrelatedassumptionschangeinthefuture,wemayberequiredtorecognizeanimpairmentlossfortheseassets.Therecognitionofanyresultingimpairmentlosscouldhaveamaterialadverseimpactonourfinancialstatements.

Weperformannualimpairmenttestsandre-evaluatetheusefullivesofotherintangibleassetswithindefinitelivesattheannualimpairmenttestmeasurementdateofJanuary1orwhencircumstancesarisethatindicateapossibleimpairmentorchangeinusefullifemightexist.

Goodwill–OurreportingunitswithgoodwillincludetheBeersegmentandtheWineandSpiritssegment.Inthefourthquarteroffiscal2021,weperformedourannualgoodwillimpairmentanalysisusingthequantitativeassessment.Noindicationofimpairmentwasnotedforanyofourreportingunits,astheestimatedfairvalueofeachofourreportingunitswithgoodwillexceededtheircarryingvalue.Basedonthisanalysis,thereportingunitwiththelowestamountofestimatedfairvalueinexcessofitscarryingvaluewastheWineandSpiritsreportingunitwithapproximately108%excessfairvalue.ForFiscal2020andFiscal2019,asaresultofourannualgoodwillimpairmentanalyses,weconcludedthattherewerenoindicationsofimpairmentforeitherofourreportingunits.

Themostsignificantassumptionsusedinthediscountedcashflowcalculationtodeterminetheestimatedfairvalueofourreportingunitsinconnectionwiththeimpairmenttestingare:(i)thediscountrate,(ii)theexpectedlong-termgrowthrate,and(iii)theannualcashflowprojections.AsofJanuary1,2021,ifweusedadiscountratethatwas50basispointshigherorusedanexpectedlong-termgrowthratethatwas50basispointslowerorusedannualcashflowprojectionsthatwere100basispointslowerinourimpairmenttestingofgoodwill,thenthechangesindividuallywouldnothaveresultedinthecarryingvalueoftherespectivereportingunit’snetassets,includingitsgoodwill,exceedingitsestimatedfairvalue.Therefore,wedidnothaveanyindicationofpotentialimpairment.

Otherintangibleassets–consistprimarilyofcustomerrelationshipsandtrademarksobtainedthroughbusinessacquisitions.Customerrelationshipsareamortizedovertheirestimatedusefullives.Thetrademarksthatweredeterminedtohaveindefiniteusefullivesarenotamortized.Usingthequantitativeassessment,ourtrademarksareevaluatedforimpairmentbycomparingthecarryingvalueofthetrademarkstotheirestimatedfairvalue.Theestimatedfairvalueoftrademarksiscalculatedbasedonanincomeapproachusingtherelieffromroyaltymethod.

Inthefourthquarteroffiscal2021,theBeersegment’sFourCornerscraftbeerbusinessrecognizeda$6.0millionimpairmentlossinconnectionwithitstrademarkasset.CertainnegativetrendswithinourFourCornerscraftbeerportfolio,includingslowergrowthratesandincreasedcompetition,resultedinupdatedlong-termfinancialforecastsindicatinglowerrevenueandcashflowgenerationfortherelatedportfolio.Thischangeinfinancialforecastsindicateditwasmorelikelythannotthefairvalueofourindefinite-livedintangibleassetassociatedwiththeFourCornerscraftbeertrademarkmightbebelowitscarryingvalue.Accordingly,weperformedaquantitativeassessmentforimpairment.Duringthesecondquarteroffiscal2020,certaincontinuingnegativetrendswithinourBeersegment’sBallastPointcraftbeerportfolio,including

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increasedrateofrevenuedeclineandincreasedcompetition,indicatedthatitwasmorelikelythannotthefairvalueofourindefinite-livedintangibleassetassociatedwiththeBallastPointcraftbeertrademarksmightbebelowitscarryingvalue.Accordingly,weperformedaquantitativeassessmentforimpairment.Asaresultofthisassessment,theBallastPointcraftbeertrademarkassetrecognizedanimpairmentlossof$11.0million.Forthefourthquarteroffiscal2019,theBeersegment’sBallastPointbusinessrecognizedatrademarkimpairmentlossof$108.0millioninconnectionwithcertaincontinuingnegativetrendswithinitscraftbeerportfolioandachangeinstrategyforthisportfoliofocusedonimprovingprofitabilitybyrationalizingthenumberofproductofferingswhiletargetingdistributiongrowthinselectstrategicmarkets.RefertoNote7forfurtherdiscussion.

Themostsignificantassumptionsusedintherelieffromroyaltymethodtodeterminetheestimatedfairvalueofintangibleassetswithindefinitelivesinconnectionwithimpairmenttestingare:(i)theestimatedroyaltyrate,(ii)thediscountrate,(iii)theexpectedlong-termgrowthrate,and(iv)theannualrevenueprojections.AsofJanuary1,2021,ifweusedaroyaltyratethatwas50basispointslowerorusedadiscountratethatwas50basispointshigherorusedanexpectedlong-termgrowthratethatwas50basispointslowerorusedannualrevenueprojectionsthatwere100basispointslowerinourimpairmenttestingofintangibleassetswithindefinitelives,theneachchangeindividuallywouldnothaveresultedinanyunitofaccounting’scarryingvalueexceedingitsestimatedfairvalue.

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

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

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

Webelievealltaxpositionsarefullysupported.WerecognizetaxassetsandliabilitiesinaccordancewiththeFASBguidanceforincometaxaccounting.Accordingly,werecognizeataxbenefitfromanuncertaintaxpositionwhenitismorelikelythannotthepositionwillbesustaineduponexaminationbasedonthelargestbenefitthathasagreaterthan50%likelihoodofbeingrealizeduponultimatesettlement.Duetothecomplexityofsomeoftheseuncertainties,theultimateresolutionmayresultinapaymentthatismateriallydifferentfromourcurrentestimateoftheunrecognizedtaxbenefitliabilities.Inaddition,changesinexistingtaxlawsorratescouldsignificantlychangeourcurrentestimateofourunrecognizedtaxbenefitliabilities.Thesedifferenceswillbereflectedasincreasesor

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decreasestoincometaxexpenseintheperiodinwhichtheyaredetermined.Changesincurrentestimates,ifsignificant,couldhaveamaterialadverseimpactonourfinancialstatements.

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

ChangeinAccountingGuidance

AccountingguidanceadoptedforFiscal2021didnothaveamaterialimpactonourconsolidatedfinancialstatements.

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Item7A.QuantitativeandQualitativeDisclosuresAboutMarketRisk

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

ForeigncurrencyandcommoditypriceriskForeigncurrencyderivativeinstrumentsareormaybeusedtohedgeexistingforeigncurrency

denominatedassetsandliabilities,forecastedforeigncurrencydenominatedsales/purchasesto/fromthirdpartiesaswellasintercompanysales/purchases,intercompanyprincipalandinterestpayments,andinconnectionwithinvestments,acquisitions,ordivestituresoutsidetheU.S.AsofFebruary28,2021,wehadexposurestoforeigncurrencyriskprimarilyrelatedtotheMexicanpeso,euro,NewZealanddollar,andCanadiandollar.Approximately100%ofourbalancesheetexposuresand82%ofourforecastedtransactionalexposuresfortheyearendingFebruary28,2022,werehedgedasofFebruary28,2021.

Commodityderivativeinstrumentsareormaybeusedtohedgeforecastedcommoditypurchasesfromthirdpartiesaseithereconomichedgesoraccountinghedges.AsofFebruary28,2021,exposurestocommoditypriceriskwhichwearecurrentlyhedgingincludealuminum,corn,dieselfuel,naturalgas,andwheatprices.Approximately67%ofourforecastedtransactionalexposuresfortheyearendingFebruary28,2022,werehedgedasofFebruary28,2021.

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

AggregateNotionalValue

FairValue,NetAsset(Liability)

Increase(Decrease)inFairValue–Hypothetical

10%AdverseChangeFebruary28,

2021February29,

2020February28,

2021February29,

2020February28,

2021February29,

2020(inmillions)

Foreigncurrencycontracts $ 2,262.7 $ 3,011.2 $ 66.9 $ 61.9 $ (129.7) $ (193.3)Commodityderivativecontracts $ 221.6 $ 282.8 $ 15.9 $ (40.3) $ (22.5) $ 21.7

InterestrateriskTheestimatedfairvalueofourfixedinterestratedebtissubjecttointerestraterisk,creditrisk,and

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

AsofFebruary29,2020,wehad$375.0millionofoutstandingcashflowdesignatedinterestrateswapagreementswhichfixedLIBORinterestrates(tominimizeinterestratevolatility)onourfloatingLIBORratedebt.TherewerenocashflowdesignatedinterestrateswapcontractsoutstandingasofFebruary28,2021.AsofFebruary28,2021,andFebruary29,2020,therewerenoundesignatedinterestrateswapcontractsoutstanding.

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AsofFebruary29,2020,wehad$300.0millionofoutstandingcashflowdesignatedtreasurylockagreementswhichfixed10-yearTreasuryinterestrates(tominimizeinterestratevolatility)onourfuturedebtissuances.TherewerenocashflowdesignatedtreasurylockcontractsoutstandingasofFebruary28,2021.AsofFebruary28,2021,andFebruary29,2020,therewerenoundesignatedtreasurylockcontractsoutstanding.

Wehaveperformedasensitivityanalysistoestimateourexposuretomarketriskofinterestratesreflectingtheimpactofahypothetical1%increaseintheprevailinginterestrates.Thevolatilityoftheapplicableratesisdependentonmanyfactorswhichcannotbeforecastedwithreliableaccuracy.Theaggregatenotionalvalue,estimatedfairvalue,andsensitivityanalysisforouroutstandingfixed-ratedebt,includingcurrentmaturitiesandopeninterestratederivativeinstruments,aresummarizedasfollows:

AggregateNotionalValue

FairValueNetAsset(Liability)

Increase(Decrease)inFairValue–Hypothetical

1%RateIncreaseFebruary28,

2021February29,

2020February28,

2021February29,

2020February28,

2021February29,

2020

(inmillions)

Fixedinterestratedebt $ 10,065.5 $ 10,075.3 $ (11,126.5) $ (10,942.8) $ (805.3) $ (708.4)

Interestrateswapcontracts $ — $ 375.0 $ — $ (0.8) $ — $ (0.3)

Treasurylockcontracts $ — $ 300.0 $ — $ (7.6) $ — $ (9.7)

A1%hypotheticalchangeintheprevailinginterestrateswouldhaveincreasedinterestexpenseonourvariableinterestratedebtby$12.4millionand$26.7millionforthefortheyearsendingFebruary28,2021,andFebruary29,2020,respectively.

EquitypriceriskTheestimatedfairvalueofourinvestmentintheCanopywarrantsandtheCanopyconvertibledebt

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

AsofFebruary28,2021,thefairvalueofourinvestmentintheCanopywarrantsandtheCanopyconvertibledebtsecuritieswas$1,816.0million,withanunrealizednetgain(loss)onthisinvestmentof$802.0millionrecognizedinourresultsofoperationsfortheyearendedFebruary28,2021.Wehaveperformedasensitivityanalysistoestimateourexposuretomarketriskoftheequitypricereflectingtheimpactofahypothetical10%adversechangeinthequotedmarketpriceoftheunderlyingequitysecurity.AsofFebruary28,2021,suchahypothetical10%adversechangewouldhaveresultedinadecreaseinfairvalueof$282.7million.

Foradditionaldiscussiononourmarketrisk,refertoNotes6and7.

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Item8.FinancialStatementsandSupplementaryData

CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESINDEXTOCONSOLIDATEDFINANCIALSTATEMENTS

FEBRUARY28,2021

Page

Management’sAnnualReportonInternalControlOverFinancialReporting 55

ReportsofIndependentRegisteredPublicAccountingFirm–KPMGLLP 56ConsolidatedBalanceSheets 60ConsolidatedStatementsofComprehensiveIncome(Loss) 61ConsolidatedStatementsofChangesinStockholders’Equity 62ConsolidatedStatementsofCashFlows 63

NotestoConsolidatedFinancialStatements1. DescriptionofBusiness,BasisofPresentation,andSummaryofSignificantAccountingPolicies 65

2. Acquisitions,Divestitures,andBusinessTransformation 70

3. Inventories 73

4. PrepaidExpensesandOther 74

5. Property,Plant,andEquipment 74

6. DerivativeInstruments 75

7. FairValueofFinancialInstruments 78

8. Goodwill 84

9. IntangibleAssets 84

10. EquityMethodInvestments 85

11. OtherAccruedExpensesandLiabilities 88

12. Borrowings 88

13. IncomeTaxes 94

14. DeferredIncomeTaxesandOtherLiabilities 97

15. Leases 98

16. CommitmentsandContingencies 100

17. Stockholders'Equity 101

18. Stock-BasedEmployeeCompensation 103

19. NetIncome(Loss)PerCommonShareAttributabletoCBI 107

20. AccumulatedOtherComprehensiveIncome(Loss) 108

21. SignificantCustomersandConcentrationofCreditRisk 109

22. BusinessSegmentInformation 110

23. SubsequentEvent 114

24. SelectedQuarterlyFinancialInformation(unaudited) 114

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Management’sAnnualReportonInternalControlOverFinancialReporting

ManagementofConstellationBrands,Inc.andsubsidiaries(the“Company”)isresponsibleforestablishingandmaintaininganadequatesystemofinternalcontroloverfinancialreporting.ThissystemisdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithU.S.generallyacceptedaccountingprinciples.

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

Becauseofitsinherentlimitations,asystemofinternalcontroloverfinancialreportingcanprovideonlyreasonableassuranceandmaynotpreventordetectmisstatements.Further,becauseofchangesinconditions,effectivenessofinternalcontrolsoverfinancialreportingmayvaryovertime.

ManagementconductedanevaluationoftheeffectivenessofthesystemofinternalcontroloverfinancialreportingbasedontheframeworkinInternalControl–IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizations(COSO)oftheTreadwayCommission.Basedonthatevaluation,managementconcludedthattheCompany’sinternalcontroloverfinancialreportingwaseffectiveasofFebruary28,2021.

TheeffectivenessoftheCompany’sinternalcontroloverfinancialreportinghasbeenauditedbyKPMGLLP,anindependentregisteredpublicaccountingfirm,asstatedintheirreportwhichisincludedherein.



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ReportofIndependentRegisteredPublicAccountingFirm

TotheStockholdersandBoardofDirectorsConstellationBrands,Inc.:

OpiniononInternalControlOverFinancialReporting

WehaveauditedConstellationBrands,Inc.andsubsidiaries’(theCompany)internalcontroloverfinancialreportingasofFebruary28,2021,basedoncriteriaestablishedinInternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission.Inouropinion,theCompanymaintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofFebruary28,2021,basedoncriteriaestablishedinInternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission.

Wealsohaveaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB),theconsolidatedbalancesheetsoftheCompanyasofFebruary28,2021andFebruary29,2020,therelatedconsolidatedstatementsofcomprehensiveincome(loss),changesinstockholders’equity,andcashflowsforeachofthefiscalyearsinthethree-yearperiodendedFebruary28,2021,andtherelatednotes(collectively,theconsolidatedfinancialstatements),andourreportdatedApril20,2021expressedanunqualifiedopiniononthoseconsolidatedfinancialstatements.

BasisforOpinion

TheCompany’smanagementisresponsibleformaintainingeffectiveinternalcontroloverfinancialreportingandforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedintheaccompanyingManagement’sAnnualReportonInternalControlOverFinancialReporting.OurresponsibilityistoexpressanopinionontheCompany’sinternalcontroloverfinancialreportingbasedonouraudit.WeareapublicaccountingfirmregisteredwiththePCAOBandarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

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

DefinitionandLimitationsofInternalControlOverFinancialReporting

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



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Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

/s/KPMGLLP

Rochester,NewYorkApril20,2021



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ReportofIndependentRegisteredPublicAccountingFirm

TotheStockholdersandBoardofDirectorsConstellationBrands,Inc.:

OpinionontheConsolidatedFinancialStatements

WehaveauditedtheaccompanyingconsolidatedbalancesheetsofConstellationBrands,Inc.andsubsidiaries(theCompany)asofFebruary28,2021andFebruary29,2020,therelatedconsolidatedstatementsofcomprehensiveincome(loss),changesinstockholders’equity,andcashflowsforeachofthefiscalyearsinthethree-yearperiodendedFebruary28,2021,andtherelatednotes(collectively,theconsolidatedfinancialstatements).Inouropinion,theconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyasofFebruary28,2021andFebruary29,2020,andtheresultsofitsoperationsanditscashflowsforeachofthefiscalyearsinthethree-yearperiodendedFebruary28,2021,inconformitywithU.S.generallyacceptedaccountingprinciples.

Wealsohaveaudited,inaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB),theCompany’sinternalcontroloverfinancialreportingasofFebruary28,2021,basedoncriteriaestablishedinInternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission,andourreportdatedApril20,2021expressedanunqualifiedopinionontheeffectivenessoftheCompany’sinternalcontroloverfinancialreporting.

BasisforOpinion

TheseconsolidatedfinancialstatementsaretheresponsibilityoftheCompany’smanagement.Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePCAOBandarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

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

CriticalAuditMatters

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

FairvaluemeasurementoftheCanopywarrants

AsdiscussedinNotes1and7totheconsolidatedfinancialstatements,theCompanyestablishedpoliciesformeasuringthefairvalueoffinancialinstruments,includingtheNovember2018CanopyWarrants.AsofFebruary28,2021,therecordedbalanceoftheCompany’sinvestmentintheNovember2018CanopyWarrantswas$1,639.7million.TheCompanyusesoptionpricingmodelstoestimatethefairvalueoftheNovember2018CanopyWarrantsusingvariousmarket-basedinputs.



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WeidentifiedtheevaluationofthefairvaluemeasurementoftheNovember2018CanopyWarrantsasacriticalauditmatter.Specifically,ahighdegreeofsubjectiveauditorjudgment,includingtheinvolvementofvaluationprofessionalswithspecializedskillsandknowledge,wasrequiredinevaluatingthedeterminationoftheexpectedvolatilityinputsusedintheoptionpricingmodelsfortheNovember2018CanopyWarrants.Historical,implied,andpeergroupvolatilitylevelsprovidearangeofpossibleexpectedvolatilityinputsandthefairvalueestimatesfortheNovember2018CanopyWarrantsweresensitivetotheexpectedvolatilityinputs.

Thefollowingaretheprimaryproceduresweperformedtoaddressthiscriticalauditmatter.WeevaluatedthedesignandtestedtheoperatingeffectivenessofcertaininternalcontrolsrelatedtothefairvaluemeasurementoftheNovember2018CanopyWarrants.Thisincludedcontrolsrelatedtotheevaluationofobservablemarketinformationusedinthedeterminationoftheexpectedvolatilityinputs.Weinvolvedvaluationprofessionalswithspecializedskillsandknowledge,whoassistedinevaluatingtheexpectedvolatilityinputsbycomparingthemagainstavolatilityrangethatwasindependentlydevelopedinconsiderationofhistorical,implied,andpeergroupvolatilityinformationandindevelopinganestimateoftheNovember2018CanopyWarrants’fairvalueusingtheindependently-developedvolatilityrangeandcomparingittothevaluedeterminedbytheCompany.

Unrecognizedtaxbenefits

AsdiscussedinNotes1and13totheconsolidatedfinancialstatements,theCompanyrecognizesataxbenefitfromanuncertaintaxpositionwhenitismorelikelythannotthatthepositionwillbesustaineduponexamination.TheCompanyhasrecordedunrecognizedtaxbenefitsof$236.1millionasofFebruary28,2021.

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

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

/s/KPMGLLP

WehaveservedastheCompany’sauditorsince2002.

Rochester,NewYorkApril20,2021



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CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDBALANCESHEETS

(inmillions,exceptshareandpersharedata)February28,

2021February29,

2020

ASSETSCurrentassets:

Cashandcashequivalents $ 460.6 $ 81.4

Accountsreceivable 785.3 864.8

Inventories 1,291.1 1,373.6

Prepaidexpensesandother 507.5 535.8

Assetsheldforsale-current — 628.5

Totalcurrentassets 3,044.5 3,484.1

Property,plant,andequipment 5,821.6 5,333.0

Goodwill 7,793.5 7,757.1

Intangibleassets 2,732.1 2,718.9

Equitymethodinvestments 2,788.4 3,093.9

Securitiesmeasuredatfairvalue 1,818.1 1,117.1

Deferredincometaxes 2,492.5 2,656.3

Assetsheldforsale — 552.1

Otherassets 614.1 610.7

Totalassets $ 27,104.8 $ 27,323.2

LIABILITIESANDSTOCKHOLDERS’EQUITYCurrentliabilities:

Short-termborrowings $ — $ 238.9

Currentmaturitiesoflong-termdebt 29.2 734.9

Accountspayable 460.0 557.6

Otheraccruedexpensesandliabilities 779.9 780.4

Totalcurrentliabilities 1,269.1 2,311.8

Long-termdebt,lesscurrentmaturities 10,413.1 11,210.8

Deferredincometaxesandotherliabilities 1,493.5 1,326.3

Totalliabilities 13,175.7 14,848.9

Commitmentsandcontingencies(Note17)CBIstockholders’equity:

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

ClassACommonStock,$0.01parvalue–Authorized,322,000,000shares;Issued,187,204,280sharesand186,090,745shares,respectively 1.9 1.9

ClassBConvertibleCommonStock,$0.01parvalue–Authorized,30,000,000shares;Issued,28,270,288sharesand28,300,206shares,respectively 0.3 0.3

Class1CommonStock,$0.01parvalue–Authorized,25,000,000shares;Issued,612,936sharesand1,692,227shares,respectively — —

Additionalpaid-incapital 1,604.2 1,514.6

Retainedearnings 15,117.8 13,695.3

Accumulatedothercomprehensiveincome(loss) (335.5) (266.3) 16,388.7 14,945.8

Less:Treasurystock–ClassACommonStock,atcost,17,070,550sharesand18,256,826shares,respectively (2,787.6) (2,811.8)

ClassBConvertibleCommonStock,atcost,5,005,800shares (2.2) (2.2) (2,789.8) (2,814.0)

TotalCBIstockholders’equity 13,598.9 12,131.8

Noncontrollinginterests 330.2 342.5

Totalstockholders’equity 13,929.1 12,474.3

Totalliabilitiesandstockholders’equity $ 27,104.8 $ 27,323.2

Theaccompanyingnotesareanintegralpartofthesestatements.



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CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCOMPREHENSIVEINCOME(LOSS)

(inmillions,exceptpersharedata)FortheYearsEnded

February28,2021

February29,2020

February28,2019

Sales $ 9,355.7 $ 9,113.0 $ 8,884.3Excisetaxes (740.8) (769.5) (768.3)Netsales 8,614.9 8,343.5 8,116.0Costofproductsold (4,148.9) (4,191.6) (4,035.7)Grossprofit 4,466.0 4,151.9 4,080.3Selling,general,andadministrativeexpenses (1,665.1) (1,621.8) (1,668.1)Impairmentofassetsheldforsale (24.0) (449.7) —Gain(loss)onsaleofbusiness 14.2 74.1 —

Operatingincome(loss) 2,791.1 2,154.5 2,412.2Income(loss)fromunconsolidatedinvestments 150.3 (2,668.6) 2,101.6Interestexpense (385.7) (428.7) (367.1)Lossonextinguishmentofdebt (12.8) (2.4) (1.7)Income(loss)beforeincometaxes 2,542.9 (945.2) 4,145.0(Provisionfor)benefitfromincometaxes (511.1) 966.6 (685.9)Netincome(loss) 2,031.8 21.4 3,459.1Netincome(loss)attributabletononcontrollinginterests (33.8) (33.2) (23.2)Netincome(loss)attributabletoCBI $ 1,998.0 $ (11.8) $ 3,435.9

Netincome(loss)percommonshareattributabletoCBI:Basic–ClassACommonStock $ 10.44 $ (0.07) $ 18.24Basic–ClassBConvertibleCommonStock $ 9.48 $ (0.07) $ 16.57

Diluted–ClassACommonStock $ 10.23 $ (0.07) $ 17.57Diluted–ClassBConvertibleCommonStock $ 9.42 $ (0.07) $ 16.21

Weightedaveragecommonsharesoutstanding:Basic–ClassACommonStock 170.239 168.329 167.249Basic–ClassBConvertibleCommonStock 23.280 23.313 23.321

Diluted–ClassACommonStock 195.308 168.329 195.532Diluted–ClassBConvertibleCommonStock 23.280 23.313 23.321

Cashdividendsdeclaredpercommonshare:ClassACommonStock $ 3.00 $ 3.00 $ 2.96ClassBConvertibleCommonStock $ 2.72 $ 2.72 $ 2.68

Comprehensiveincome(loss):Netincome(loss) $ 2,031.8 $ 21.4 $ 3,459.1Othercomprehensiveincome(loss),netofincometaxeffect:

Foreigncurrencytranslationadjustments (56.0) 60.8 (196.8)Unrealizedgain(loss)oncashflowhedges (20.9) 40.4 11.4Unrealizedgain(loss)onavailable-for-saledebtsecurities — — 2.5Pension/postretirementadjustments (1.6) (0.6) 0.5Shareofothercomprehensiveincome(loss)ofequitymethodinvestments (1.8) (10.1) 29.6

Othercomprehensiveincome(loss),netofincometaxeffect (80.3) 90.5 (152.8)Comprehensiveincome(loss) 1,951.5 111.9 3,306.3Comprehensive(income)lossattributabletononcontrollinginterests (22.7) (36.1) (21.4)Comprehensiveincome(loss)attributabletoCBI $ 1,928.8 $ 75.8 $ 3,284.9




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CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCHANGESINSTOCKHOLDERS’EQUITY

(inmillions)

BalanceatFebruary28,2018 $ 2.6 $ 0.3 $ 2,825.3 $ 9,157.2 $ (202.9) $ (3,807.4) $ 16.6 $ 7,991.7

Cumulativeeffectofchangeinaccountingprinciple — — — 2,242.0 — — — 2,242.0

Comprehensiveincome(loss):

Netincome(loss) — — — 3,435.9 — — 23.2 3,459.1

Othercomprehensiveincome(loss),netofincometaxeffect — — — — (151.0) — (1.8) (152.8)

Comprehensiveincome(loss) 3,306.3

Retirementoftreasuryshares (0.7) — (1,522.3) — — 1,523.0 — —

Repurchaseofshares — — — — — (504.3) — (504.3)

Dividendsdeclared — — — (558.9) — — — (558.9)

Conversionoflong-termdebttononcontrollingequityinterest — — — — — — 248.2 248.2

Sharesissuedunderequitycompensationplans — — 45.2 — — 4.4 — 49.6

Stock-basedcompensation — — 62.6 — — — — 62.6

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


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

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

Comprehensiveincome(loss) 111.9

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


Initialrecognitionofnon-controllinginterest — — — — — — 20.2 20.2



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


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

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

Comprehensiveincome(loss) 1,951.5


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



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

CommonStockAdditionalPaid-inCapital

RetainedEarnings

AccumulatedOther

ComprehensiveIncome(Loss)

TreasuryStock

Non-controllingInterests TotalClassA ClassB




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CASHFLOWSFROMOPERATINGACTIVITIES

Netincome(loss) $ 2,031.8 $ 21.4 $ 3,459.1Adjustmentstoreconcilenetincome(loss)tonetcashprovidedbyoperatingactivities:

Unrealizednet(gain)lossonsecuritiesmeasuredatfairvalue (802.0) 2,126.4 (1,971.2)

Deferredtaxprovision(benefit) 336.4 (1,153.7) 426.9

Depreciation 293.8 326.5 333.1

Stock-basedcompensation 63.0 60.4 64.1Equityin(earnings)lossesofequitymethodinvesteesandrelatedactivities,netofdistributedearnings 673.4 560.8 13.5

Noncashleaseexpense 83.3 88.3 —

Impairmentandamortizationofintangibleassets 11.3 16.7 114.0Amortizationofdebtissuancecostsandlossonextinguishmentofdebt 24.3 16.1 29.4

Net(gain)lossonsaleofunconsolidatedinvestment — (0.4) (99.8)

Impairmentofassetsheldforsale 24.0 449.7 —

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

Lossonsettlementoftreasurylockcontracts (29.3) — —

NetincometaxbenefitrelatedtotheTaxCutsandJobsAct — — (37.6)Changeinoperatingassetsandliabilities,netofeffectsfrompurchaseandsaleofbusiness:

Accountsreceivable 59.6 (22.0) (71.9)

Inventories 193.7 (29.5) (61.9)

Prepaidexpensesandothercurrentassets 65.7 8.1 (103.0)

Accountspayable (95.7) 16.8 21.4

Otheraccruedexpensesandliabilities (75.0) (58.5) (22.1)

Other (63.4) 75.1 152.3

Totaladjustments 774.7 2,529.7 (1,212.8)

Netcashprovidedby(usedin)operatingactivities 2,806.5 2,551.1 2,246.3

CASHFLOWSFROMINVESTINGACTIVITIES

Purchaseofproperty,plant,andequipment (864.6) (726.5) (886.3)

Purchaseofbusiness,netofcashacquired (19.9) (36.2) (45.6)

Investmentsinequitymethodinvesteesandsecurities (222.4) (48.2) (4,081.5)

Proceedsfromsaleofassets 18.9 8.3 72.3

Proceedsfromsaleofunconsolidatedinvestment — 1.5 110.2

Proceedsfromsaleofbusiness 999.5 269.7 —

Otherinvestingactivities 0.6 0.4 (0.9)

Netcashprovidedby(usedin)investingactivities (87.9) (531.0) (4,831.8)

CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCASHFLOWS

(inmillions)

FortheYearsEnded

February28,2021

February29,2020

February28,2019



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CASHFLOWSFROMFINANCINGACTIVITIES

Proceedsfromissuanceoflong-termdebt 1,194.7 1,291.3 3,657.6

Principalpaymentsoflong-termdebt (2,721.3) (2,195.3) (62.8)

Netproceedsfrom(repaymentsof)short-termborrowings (238.9) (552.6) 45.5

Dividendspaid (575.0) (569.2) (557.7)

Purchaseoftreasurystock — (50.0) (504.3)

Proceedsfromsharesissuedunderequitycompensationplans 58.9 78.2 63.2Paymentsofminimumtaxwithholdingsonstock-basedpaymentawards (7.7) (14.3) (13.6)Paymentsofdebtissuance,debtextinguishment,andotherfinancingcosts (22.3) (8.2) (34.6)

Distributionstononcontrollinginterests (35.0) — —

Paymentofcontingentconsideration — (11.3) —

Netcashprovidedby(usedin)financingactivities (2,346.6) (2,031.4) 2,593.3

Effectofexchangeratechangesoncashandcashequivalents 7.2 (0.9) (4.5)

Netincrease(decrease)incashandcashequivalents 379.2 (12.2) 3.3

Cashandcashequivalents,beginningofyear 81.4 93.6 90.3

Cashandcashequivalents,endofyear $ 460.6 $ 81.4 $ 93.6

SUPPLEMENTALDISCLOSURESOFCASHFLOWINFORMATION

Cashpaidduringtheyear

Interest,netofinterestcapitalized $ 418.5 $ 448.9 $ 324.8

Incometaxes,netofrefundsreceived $ 189.7 $ 85.3 $ 186.2

Noncashinvestingandfinancingactivities

Additionstoproperty,plant,andequipment $ 101.1 $ 70.4 $ 141.7

Conversionoflong-termdebttononcontrollingequityinterest $ — $ — $ 248.2

CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESCONSOLIDATEDSTATEMENTSOFCASHFLOWS

(inmillions)

FortheYearsEnded

February28,2021

February29,2020

February28,2019




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CONSTELLATIONBRANDS,INC.ANDSUBSIDIARIESNOTESTOCONSOLIDATEDFINANCIALSTATEMENTS

FEBRUARY28,2021

1. DESCRIPTIONOFBUSINESS,BASISOFPRESENTATION,ANDSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

DescriptionofbusinessConstellationBrands,Inc.anditssubsidiariesoperateprimarilyinthebeveragealcoholindustry.Weare

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

BasisofpresentationPrinciplesofconsolidationOurconsolidatedfinancialstatementsincludeouraccountsandourmajority-ownedandcontrolled

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

EquitymethodinvestmentsIfwearenotrequiredtoconsolidateourinvestmentinanotherentity,weusetheequitymethodwhen

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

Management’suseofestimatesThepreparationoffinancialstatementsinconformitywithU.S.generallyacceptedaccountingprinciples

requiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatementsandthereportedamountsofrevenuesandexpensesduringthereportingperiod.Actualresultscoulddifferfromthoseestimates.

SummaryofsignificantaccountingpoliciesRevenuerecognitionOurrevenue(referredtoinourfinancialstatementsas“sales”)consistsprimarilyofthesaleofbeer,wine,

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

Asnoted,themajorityofourrevenuesaregeneratedfromthedomesticsaleofbeer,wine,andspiritstowholesaledistributorsintheU.S.Ourotherrevenuegeneratingactivitiesincludetheexportofcertainofourproductstoselectinternationalmarkets,aswellasthesaleofourproductsthroughstatealcoholbeveragecontrolagenciesandon-premise,retaillocationsincertainmarkets.Wehaveevaluatedtheseotherrevenuegeneratingactivitiesunderthedisaggregationdisclosurecriteriaoutlinedwithintheamendedguidanceandconcludedthat



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theseotherrevenuegeneratingactivitiesareimmaterialforseparatedisclosure.SeeNote22fordisclosureofnetsalesbyproducttype.

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

Excisetaxesremittedtotaxauthoritiesaregovernment-imposedexcisetaxesonourbeveragealcoholproducts.Excisetaxesareshownonaseparatelineitemasareductionofsalesandarerecognizedinourresultsofoperationswhentherelatedproductsaleisrecognized.Excisetaxesarerecognizedasacurrentliabilityinotheraccruedexpensesandliabilities,withtheliabilitysubsequentlyreducedwhenthetaxesareremittedtothetaxauthority.

CostofproductsoldThetypesofcostsincludedincostofproductsoldarerawmaterials,packagingmaterials,manufacturing

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

Selling,general,andadministrativeexpensesThetypesofcostsincludedinselling,general,andadministrativeexpensesconsistpredominatelyof

advertisingandnon-manufacturingadministrativeandoverheadcosts.Distributionnetworkcostsareincludedincostofproductsold.Weexpenseadvertisingcostsasincurred,shown,ordistributed.AdvertisingexpensefortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019,was$805.0million,$769.5million,and$700.8million,respectively.

ForeigncurrencytranslationThefunctionalcurrencyofourforeignsubsidiariesisgenerallytherespectivelocalcurrency.The

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

CashandcashequivalentsCashequivalentsconsistofhighlyliquidinvestmentswithanoriginalmaturitywhenpurchasedofthree

monthsorlessandarestatedatcost,whichapproximatesfairvalue.

InventoriesInventoriesarestatedatthelowerofcost(primarilycomputedinaccordancewiththefirst-in,first-out

method)ornetrealizablevalue.Elementsofcostincludematerials,labor,andoverhead.

Bulkwineinventoriesareincludedasin-processinventorieswithincurrentassets,inaccordancewiththegeneralpracticesofthewineindustry,althoughaportionofsuchinventoriesmaybeagedforperiodsgreaterthanoneyear.Asubstantialportionofbarreledwhiskeyandbrandywillnotbesoldwithinoneyearbecauseofthe



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durationoftheagingprocess.Allbarreledwhiskeyandbrandyareclassifiedasin-processinventoriesandareincludedincurrentassets,inaccordancewithindustrypractice.Warehousing,insurance,valueaddedtaxes,andothercarryingchargesapplicabletobarreledwhiskeyandbrandyheldforagingareincludedininventorycosts.

Weassessthevaluationofourinventoriesandreducethecarryingvalueofthoseinventoriesthatareobsoleteorinexcessofourforecastedusagetotheirestimatednetrealizablevaluebasedonanalysesandassumptionsincluding,butnotlimitedto,historicalusage,futuredemand,andmarketrequirements.

Property,plant,andequipmentProperty,plant,andequipmentisstatedatcost.Majoradditionsandimprovementsarerecognizedasan

increasetothepropertyaccounts,whilemaintenanceandrepairsareexpensedasincurred.Thecostofpropertiessoldorotherwisedisposedofandtherelatedaccumulateddepreciationareeliminatedfromthebalancesheetaccountsatthetimeofdisposalandresultinggainsandlossesareincludedasacomponentofoperatingincome.

Interestincurredrelatingtoexpansion,construction,andoptimizationoffacilitiesiscapitalizedtoconstructioninprogress.Weceasethecapitalizationofinterestwhenconstructionactivitiesaresubstantiallycompletedandthefacilityandrelatedassetsareavailablefortheirintendeduse.Atthispoint,constructioninprogressistransferredtotheappropriateassetclass.

DepreciationDepreciationiscomputedprimarilyusingthestraight-linemethodoverthefollowingestimateduseful

lives:Years

Landimprovements 15to32Vineyards 16to26Buildingsandimprovements 10to50Machineryandequipment 3to35Motorvehicles 3to8

DerivativeinstrumentsWeenterintoderivativeinstrumentstomanageourexposuretofluctuationsinforeigncurrencyexchange

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

Thechangeinthefairvalueofoutstandingcashflowhedgesisdeferredinstockholders’equityasacomponentofAOCI.Forallperiodspresentedherein,gainsorlossesdeferredinstockholders’equityasacomponentofAOCIarerecognizedinourresultsofoperationsinthesameperiodinwhichthehedgeditemsarerecognizedandonthesamefinancialstatementlineitemasthehedgeditems.

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



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Cashflowsfromthesettlementofderivatives,includingbotheconomichedgesandthosedesignatedinhedgeaccountingrelationships,appearonourstatementsofcashflowsinthesamecategoriesasthecashflowsofthehedgeditems.

FairvalueoffinancialinstrumentsWecalculatetheestimatedfairvalueoffinancialinstrumentsusingquotedmarketpriceswhenever

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

GoodwillandotherintangibleassetsGoodwillisallocatedtothereportingunitinwhichthebusinessthatcreatedthegoodwillresides.A

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

IncometaxesWeusetheassetandliabilitymethodofaccountingforincometaxes.Thismethodaccountsfordeferred

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

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

LeasesWerecognizeright-of-useassetsandleaseliabilitiesonourbalancesheetinaccordancewiththeFASB

guidanceforaccountingforleases.Weassessservicearrangementstodetermineifanassetisexplicitlyorimplicitlyspecifiedintheagreementandifwehavetherighttocontroltheuseoftheidentifiedasset.

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

Theright-of-useassetandleaseliabilityarecalculatedincludingoptionstoextendortoterminatetheleasewhenwedeterminethatitisreasonablycertainthatwewillexercisethoseoptions.Inmakingthat



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

Certainofourcontractualarrangementsmaycontainbothleaseandnon-leasecomponents.Weelectedtomeasuretheleaseliabilitybycombiningtheleaseandnon-leasecomponentsasasingleleasecomponentforallassetclasses.

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

IndemnificationliabilitiesWehaveindemnifiedrespectivepartiesagainstcertainliabilitiesthatmayariseinconnectionwithcertain

acquisitionsanddivestitures.Indemnificationliabilitiesarerecognizedwhenprobableandestimableandincludedindeferredincometaxesandotherliabilities(seeNote16).

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

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

Netincome(loss)percommonshareattributabletoCBIWehavetwoclassesofcommonstockwithamaterialnumberofsharesoutstanding:ClassACommon

StockandClassBConvertibleCommonStock(seeNote17).Inaddition,wehaveanotherclassofcommonstockwithanimmaterialnumberofsharesoutstanding:Class1CommonStock(seeNote17).IfwepayacashdividendonClassBConvertibleCommonStock,eachshareofClassACommonStockwillreceiveanamountatleasttenpercentgreaterthantheamountofthecashdividendpersharepaidonClassBConvertibleCommonStock.ClassBConvertibleCommonStocksharesareconvertibleintosharesofClassACommonStockonaone-to-onebasisatanytimeattheoptionoftheholder.

Weusethetwo-classmethodforthecomputationandpresentationofnetincome(loss)percommonshareattributabletoCBI(hereafterreferredtoas“netincome(loss)percommonshare”)(seeNote19).Thetwo-classmethodisanearningsallocationformulathatcalculatesbasicanddilutednetincome(loss)percommonshareforeachclassofcommonstockseparatelybasedondividendsdeclaredandparticipationrightsinundistributedearningsasifallsuchearningshadbeendistributedduringtheperiod.Underthetwo-classmethod,ClassACommonStockisassumedtoreceiveatenpercentgreaterparticipationinundistributedearnings(losses)thanClassBConvertibleCommonStock,inaccordancewiththerespectiveminimumdividendrightsofeachclassofstock.

Netincome(loss)percommonshare–basicexcludestheeffectofcommonstockequivalentsandiscomputedusingthetwo-classmethod.Netincome(loss)percommonshare–dilutedforClassACommonStockreflectsthepotentialdilutionthatcouldresultifsecuritiesorothercontractstoissuecommonstockwereexercisedorconvertedintocommonstock.Netincome(loss)percommonshare–dilutedforClassACommonStockiscomputedusingthemoredilutiveoftheif-convertedortwo-classmethod.Netincome(loss)percommon



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share–dilutedforClassACommonStockiscomputedusingtheif-convertedmethodfortheyearsendedFebruary28,2021andFebruary28,2019,andassumestheexerciseofstockoptionsusingthetreasurystockmethodandtheconversionofClassBConvertibleCommonStockasthismethodismoredilutivethanthetwo-classmethod.FortheyearendedFebruary29,2020,netincome(loss)percommonshare-dilutedforClassACommonStockiscomputedusingthetwo-classmethod.Netincome(loss)percommonshare–dilutedforClassBConvertibleCommonStockiscomputedusingthetwo-classmethodanddoesnotassumeconversionofClassBConvertibleCommonStockintosharesofClassACommonStock.

2. ACQUISITIONS,DIVESTITURES,ANDBUSINESSTRANSFORMATION

AcquisitionsCopper&KingsInSeptember2020,weacquiredtheremainingownershipinterestinCopper&KingsAmericanBrandy

Company.Thisacquisitionincludedacollectionoftraditionalandcraftbatch-distilledAmericanbrandiesandotherselectspirits.Thetransactionprimarilyincludedtheacquisitionofinventoryandproperty,plant,andequipment.TheresultsofoperationsofCopper&KingsarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

EmpathyWinesInJune2020,weacquiredtheEmpathyWinesbusiness,includingtheacquisitionofadigitally-nativewine

brandwhichstrengthensourpositioninthedirect-to-consumerandeCommercemarkets.Thistransactionprimarilyincludedtheacquisitionofgoodwill,trademarks,andinventory.Inaddition,thepurchasepriceforEmpathyWinesincludesanearn-outoverfiveyearsbasedonperformance.TheresultsofoperationsofEmpathyWinesarereportedintheWineandSpiritssegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromthedateofacquisition.

Nelson’sGreenBrierInMay2019,weincreasedourownershipinterestinTennessee-basedNelson’sGreenBrierto75%,

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

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

OtheracquisitionsDuringtheyearendedFebruary28,2019,wecompletedtheacquisitionsofotherbusinesses,including

theFourCornersbusiness,whichincludedaportfolioofhigh-quality,dynamic,andbicultural,Texas-basedcraftbeers,andabusinessinItaly,whichprovidedadditionalprocessingandsourcingcapabilitiesforourItalianwineportfolio.ThepurchasepricefortheFourCornersacquisitionwasprimarilyallocatedtogoodwill,property,plant,andequipment,andtrademarks,plusanearn-outoverfiveyearsbasedontheperformanceofthebrands.ThepurchasepricefortheacquiredbusinessinItalywasprimarilyallocatedtoaproductionfacility,vineyards,andinventory.Theresultsofoperationsoftheseacquiredbusinessesarereportedintherespectivesegmentandhavebeenincludedinourconsolidatedresultsofoperationsfromtheirrespectivedateofacquisition.

DivestituresPaulMassonDivestitureOnJanuary12,2021,wesoldthePaulMassonGrandeAmberBrandybrand,relatedinventory,and

interestsincertaincontracts.Wereceivedcashproceedsof$267.4million,subjecttocertainpost-closingadjustments.Thenetcashproceedswereusedforgeneralcorporatepurposes.PriortothePaulMasson



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Divestiture,werecordedtheresultsofoperationsofourPaulMassonGrandeAmberBrandybusinessintheWineandSpiritssegment.InconnectionwiththePaulMassonDivestiture,weenteredintoatransitionservicesagreementwithSazeracCompanywherebyourretainedMissionBellfacilitywillprovidecertainbulkwineprocessingservicesatmarketratesforaperiodofuptothreeyears.ThefollowingtablesummarizesthenetgainrecognizedinconnectionwiththisdivestiturefortheyearendedFebruary28,2021:

(inmillions)

Cashreceivedfrombuyer $ 267.4

Netassetssold (201.3)

Contracttermination (4.0)

Directcoststosell (3.2)

Gainonsaleofbusiness $ 58.9

WineandSpiritsDivestituresOnJanuary5,2021,wesoldaportionofourwineandspiritsbusiness,includinglower-margin,lower

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

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

InconnectionwiththeWineandSpiritsDivestitures,weenteredintocertaintransitionservicesagreementswithGallowherebyweprovidecertaincellar,package,andstorageservicesprimarilyatMissionBell.Werecordeda$13.0millionliabilityrelatedtotheunfavorabletransitionservicesagreements,whichwasincludedinthenetlossonsaleofbusinessandisbeingamortizedovertheexpectedtermofthecontractstoselling,general,andadministrativeexpensesbothwithinourconsolidatedresultsofoperations.

ThecashproceedsfromtheWineandSpiritsDivestitureswereutilizedtorepaythe3.75%May2013SeniorNotes(asdefinedinNote12)andforothergeneralcorporatepurposes.PriortotheWineandSpiritsDivestitures,werecordedtheresultsofoperationsforthisportionofourbusinessintheWineandSpiritssegment.ThefollowingtablesummarizesthenetlossrecognizedinconnectionwiththesedivestituresfortheyearendedFebruary28,2021:

(inmillions)



Transitionservicesagreements (13.0)


AOCIreclassificationadjustments,primarilyforeigncurrencytranslation (5.1)

Other (5.2)

Lossonsaleofbusiness $ (35.7)

ConcentrateBusinessDivestitureOnDecember29,2020,wesoldcertainbrandsusedinourconcentratesandhigh-colorconcentrate

business,andcertainintellectualproperty,inventory,goodwill,interestsincertaincontracts,andassetsofourconcentratesandhigh-colorconcentratebusiness.PriortotheConcentrateBusinessDivestiture,werecordedtheresultsofoperationsofourconcentratesandhigh-colorconcentratebusinessintheWineandSpiritssegment.

BallastPointDivestitureOnMarch2,2020,wesoldtheBallastPointcraftbeerbusiness,includinganumberofitsassociated

productionfacilitiesandbrewpubs.PriortotheBallastPointDivestiture,werecordedtheresultsofoperationsof



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theBallastPointcraftbeerbusinessintheBeersegment.Wereceivedcashproceedsof$41.1million,whichwereprimarilyutilizedtoreduceoutstandingborrowings.

BlackVelvetDivestitureOnNovember1,2019,wesoldtheBlackVelvetCanadianWhiskybusinessandthebrand’sassociated

productionfacility,alongwithasubsetofCanadianwhiskybrandsproducedatthatfacility,andrelatedinventory.Wereceivedcashproceedsof$266.7million,netofpost-closingadjustmentswhichwereutilizedtopartiallyrepaythe2.00%November2017SeniorNotes(asdefinedinNote12).Intotal,werecognizeda$70.5millionnetgainassociatedwiththeBlackVelvetDivestiture,with$(3.6)millionand$74.1millionrecognizedfortheyearsendedFebruary28,2021,andFebruary29,2020,respectively.PriortotheBlackVelvetDivestiture,werecordedtheresultsofoperationsofourBlackVelvetCanadianWhiskybusinessintheWineandSpiritssegment.Thefollowingtablesummarizesthenetgainrecognizedinconnectionwiththisdivestiture:

(inmillions)



AOCIreclassificationadjustments,primarilyforeigncurrencytranslation 20.9


Gainonsaleofbusiness $ 70.5

SaleofAccoladeWineInvestmentInMay2018,wecompletedthesaleofourAccoladeWineInvestment.Wereceivedcashproceeds,netof

directcoststosell,of$111.7million.ThisinterestconsistedofaninvestmentaccountedforunderthecostmethodandAFSdebtsecurities.Werecognizednetgainsof$0.4millionand$99.8millioninconnectionwiththistransactionfortheyearsendedFebruary29,2020,andFebruary28,2019,respectively.Thesenetgainsareincludedinincome(loss)fromunconsolidatedinvestments.

BusinesstransformationWehavecommittedtoabusinesstransformationstrategywhichalignsourportfoliowithconsumer-led

premiumizationtrendsandgrowingsegmentsoftheWineandSpiritsandBeermarkets.FortheyearsendedFebruary28,2021,andFebruary29,2020,long-livedassetimpairmentsof$24.0millionand$449.7millionwererecognized,respectively.ForadditionalinformationrefertoNote7.

AssetsheldforsalePrimarilyincontemplationofthePaulMassonDivestiture,theWineandSpiritsDivestitures,the

ConcentrateBusinessDivestiture,andtheBallastPointDivestiturenotedabove,certainnetassetsmettheheldforsalecriteriaasofFebruary29,2020.Thecarryingvalueofassetsheldforsaleconsistedofthefollowing:

Assets

Accountsreceivable $ 2.4 $ — $ 2.4

Inventories 13.7 576.9 590.6

Prepaidexpensesandother 2.8 32.7 35.5

Assetsheldforsale-current 18.9 609.6 628.5

February29,2020

BeerWineandSpirits Consolidated

(inmillions)



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Property,plant,andequipment 55.9 172.6 228.5

Goodwill 4.7 304.3 309.0

Intangibleassets 28.2 384.0 412.2

Equitymethodinvestments — 1.0 1.0

Otherassets 24.8 26.3 51.1

Less:Reserveforassetsheldforsale (42.7) (407.0) (449.7)

Assetsheldforsale 70.9 481.2 552.1

Liabilities

Accountspayable 0.2 0.6 0.8

Otheraccruedexpensesandliabilities 11.0 17.8 28.8

Deferredincometaxesandotherliabilities 33.3 — 33.3

Liabilitiesheldforsale(1) 44.5 18.4 62.9

Netassetsheldforsale $ 45.3 $ 1,072.4 $ 1,117.7

February29,2020


(inmillions)

(1) LiabilitiesheldforsaleareincludedintheConsolidatedBalanceSheetasofFebruary29,2020,withintherespectiveliabilitylineitemsnotedabove.

WineandspiritsoptimizationWerecognizedrestructuringandotherstrategicbusinessdevelopmentcostsinconnectionwithour

businesstransformationstrategywhichalignsourportfoliowithconsumer-ledpremiumizationtrendswithintheWineandSpiritssegmentasfollows:

FortheYearsEnded

ResultsofOperationsLocationFebruary28,

2021February29,

2020

(inmillions)

Contractterminationcosts Costofproductsold $ 20.9 $ 20.1

Lossoninventorywrite-downs Costofproductsold 4.7 102.9

Employeeterminationcosts Selling,general,andadministrativeexpenses 4.1 12.5

Othercosts Selling,general,andadministrativeexpenses 9.7 8.4

Impairmentoflong-livedassets Impairmentofassetsheldforsale 24.0 407.0

$ 63.4 $ 550.9

3. INVENTORIES

Thecomponentsofinventoriesareasfollows:

February28,2021

February29,2020(1)

(inmillions)

Rawmaterialsandsupplies $ 151.1 $ 171.7

In-processinventories 735.9 814.7

Finishedcasegoods 404.1 387.2

$ 1,291.1 $ 1,373.6

(1) TheinventoriesbalanceatFebruary29,2020,excludesamountsreclassifiedtoassetsheldforsale.



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4. PREPAIDEXPENSESANDOTHER

Themajorcomponentsofprepaidexpensesandotherareasfollows:

February28,2021

February29,2020(1)

(inmillions)

Valueaddedtaxesreceivable $ 257.8 $ 315.2

Derivativeassets 48.7 57.3

Incometaxesreceivable 45.4 35.2

Prepaidexciseandsalestaxes 40.9 38.8

Other 114.7 89.3

$ 507.5 $ 535.8

(1) TheprepaidexpensesandotherbalanceatFebruary29,2020,excludesamountsreclassifiedtoassetsheldforsale.

5. PROPERTY,PLANT,ANDEQUIPMENT

Themajorcomponentsofproperty,plant,andequipmentareasfollows:February28,

2021February29,

2020(1)

(inmillions)Landandlandimprovements $ 434.0 $ 440.2Vineyards 226.0 215.8Buildingsandimprovements 983.4 975.1Machineryandequipment 3,696.9 3,627.9Motorvehicles 131.3 109.5Constructioninprogress(2) 2,084.2 1,422.7

7,555.8 6,791.2Less–Accumulateddepreciation (1,734.2) (1,458.2)

$ 5,821.6 $ 5,333.0

(1) Theproperty,plant,andequipmentbalanceatFebruary29,2020,excludesamountsreclassifiedtoassetsheldforsale.

(2) Interestcostsincurredduringtheexpansion,construction,andoptimizationoffacilitiesarecapitalizedtoconstructioninprogress.Wecapitalizedinterestcostsof$31.5million,$37.2million,and$23.1millionfortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019,respectively,primarilyduetotheMexicoBeerProjects.

MexicaliBreweryInfiscal2017,webeganconstructionoftheMexicaliBrewery.InMarch2020,apublicconsultationwas

heldontheconstructionoftheMexicaliBrewery.Followingthenegativeresultofthepublicconsultation,weareindiscussionswithgovernmentofficialsinMexicoregardingnextstepsforourbreweryconstructionprojectandoptionselsewhereinthecountry.Weintendtocontinueworkingwithgovernmentofficialstomutuallyagreeuponapathforward.AsofFebruary28,2021,wehavesuspendedallMexicaliBreweryconstructionactivitiesandhaveapproximately$710millionofcapitalizedfixedassetsremainingatthelocation.Inadditiontothecapitalizedcosts,wehaveincurredotherexpensesinestablishingtheMexicaliBrewery.SeeNote23forfurtherdiscussion.



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6. DERIVATIVEINSTRUMENTS

OverviewWeareexposedtomarketriskfromchangesinforeigncurrencyexchangerates,commodityprices,

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

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

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

Theaggregatenotionalvalueofoutstandingderivativeinstrumentsisasfollows:

Derivativeinstrumentsdesignatedashedginginstruments

Foreigncurrencycontracts $ 1,558.0 $ 1,831.0

Interestrateswapcontracts $ — $ 375.0

Treasurylockcontracts $ — $ 300.0

Derivativeinstrumentsnotdesignatedashedginginstruments

Foreigncurrencycontracts $ 704.7 $ 1,180.2

Commodityderivativecontracts $ 221.6 $ 282.8

February28,2021

February29,2020

(inmillions)

CashflowhedgesOurderivativeinstrumentsdesignatedinhedgeaccountingrelationshipsaredesignatedascashflow

hedges.Weareexposedtoforeigndenominatedcashflowfluctuationsprimarilyinconnectionwiththirdpartyandintercompanysalesandpurchases.Weprimarilyuseforeigncurrencyforwardcontractstohedgecertainoftheserisks.Inaddition,weutilizeinterestrateswapandtreasurylockcontractsperiodicallytomanageourexposuretochangesininterestrates.Derivativesmanagingourcashflowexposuresgenerallymaturewithinthreeyearsorless,withamaximummaturityoffiveyears.

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

Whenwedeterminethataderivativeinstrumentwhichqualifiedforhedgeaccountingtreatmenthasceasedtobehighlyeffectiveasahedge,wediscontinuehedgeaccountingprospectively.Intheeventtherelationshipisnolongereffective,werecognizethechangeinthefairvalueofthehedgingderivativeinstrumentfromthedatethehedgingderivativeinstrumentbecamenolongereffectiveimmediatelyinourresultsof



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

Weexpect$26.3millionofnetgains,netofincometaxeffect,tobereclassifiedfromAOCItoourresultsofoperationswithinthenext12months.

UndesignatedhedgesCertainofourderivativeinstrumentsdonotqualifyforhedgeaccountingtreatment;forothers,we

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

CreditriskWeareexposedtocredit-relatedlossesifthecounterpartiestoourderivativecontractsdefault.This

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

Inaddition,ourderivativeinstrumentsarenotsubjecttocreditratingcontingenciesorcollateralrequirements.AsofFebruary28,2021,theestimatedfairvalueofderivativeinstrumentsinanetliabilitypositionduetocounterpartieswas$0.1million.IfwewererequiredtosettlethenetliabilitypositionunderthesederivativeinstrumentsonFebruary28,2021,wewouldhavehadsufficientavailableliquidityonhandtosatisfythisobligation.



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ResultsofperiodderivativeactivityTheestimatedfairvalueandlocationofourderivativeinstrumentsonourbalancesheetsareasfollows

(seeNote7):

Derivativeinstrumentsdesignatedashedginginstruments

Foreigncurrencycontracts:Prepaidexpensesandother $ 32.0 $ 47.8

Otheraccruedexpensesandliabilities $ 3.5 $ 13.0

Otherassets $ 41.3 $ 39.5Deferredincometaxesandotherliabilities $ 2.7 $ 7.1

Interestrateswapcontracts:Prepaidexpensesandother $ — $ —

Otheraccruedexpensesandliabilities $ — $ 0.8

Treasurylockcontracts:Prepaidexpensesandother $ — $ —

Otheraccruedexpensesandliabilities $ — $ 7.6

Derivativeinstrumentsnotdesignatedashedginginstruments

Foreigncurrencycontracts:Prepaidexpensesandother $ 3.3 $ 9.0


Commodityderivativecontracts:Prepaidexpensesandother $ 13.4 $ 0.5


Otherassets $ 7.8 $ 0.1Deferredincometaxesandotherliabilities $ 1.4 $ 15.5

Assets LiabilitiesFebruary28,

2021February29,

2020February28,

2021February29,

2020

(inmillions)

Theprincipaleffectofourderivativeinstrumentsdesignatedincashflowhedgingrelationshipsonourresultsofoperations,aswellasOCI,netofincometaxeffect,isasfollows:

FortheYearEndedFebruary28,2021

Foreigncurrencycontracts $ (31.1) Sales $ 1.4

Costofproductsold (25.4)

Interestrateswapcontracts (0.6) Interestexpense (1.1)

Treasurylockcontracts (16.1) Interestexpense (1.8)

$ (47.8) $ (26.9)

DerivativeInstrumentsinDesignatedCashFlowHedgingRelationships

NetGain(Loss)Recognized

inOCI

LocationofNetGain(Loss)ReclassifiedfromAOCIto

Income(Loss)

NetGain(Loss)ReclassifiedfromAOCItoIncome(Loss)

(inmillions)



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Foreigncurrencycontracts $ 66.8 Sales $ —

Costofproductsold 20.2

Interestrateswapcontracts (0.5) Interestexpense —

Treasurylockcontracts (5.7) Interestexpense —

$ 60.6 $ 20.2


Foreigncurrencycontracts $ 15.9 Sales $ 0.4

Costofproductsold 4.1

$ 15.9 $ 4.5

DerivativeInstrumentsinDesignatedCashFlowHedgingRelationships

NetGain(Loss)Recognized

inOCI

LocationofNetGain(Loss)ReclassifiedfromAOCIto

Income(Loss)

NetGain(Loss)ReclassifiedfromAOCItoIncome(Loss)

(inmillions)

Theeffectofourundesignatedderivativeinstrumentsonourresultsofoperationsisasfollows:


Commodityderivativecontracts Costofproductsold $ 25.1

Foreigncurrencycontracts Selling,general,andadministrativeexpenses (17.4)

$ 7.7


Commodityderivativecontracts Costofproductsold $ (49.0)


$ (56.8)


Commodityderivativecontracts Costofproductsold $ 1.8


Interestrateswapcontracts Interestexpense 35.0

$ (24.0)

DerivativeInstrumentsNotDesignatedasHedgingInstruments

LocationofNetGain(Loss)RecognizedinIncome(Loss)

NetGain(Loss)RecognizedinIncome(Loss)

(inmillions)

7. FAIRVALUEOFFINANCIALINSTRUMENTS

Authoritativeguidanceestablishesaframeworkformeasuringfairvalue,includingahierarchyforinputsusedinmeasuringfairvaluethatmaximizestheuseofobservableinputsandminimizestheuseofunobservableinputsbyrequiringthatthemostobservableinputsbeusedwhenavailable.Thehierarchyincludesthreelevels:

• Level1inputsarequotedpricesinactivemarketsforidenticalassetsorliabilities;• Level2inputsincludedatapointsthatareobservablesuchasquotedpricesforsimilarassetsor

liabilitiesinactivemarkets,quotedpricesforidenticalassetsorsimilarassetsorliabilitiesinmarketsthatarenotactive,andinputs(otherthanquotedprices)suchasvolatility,interestratesandyieldcurvesthatareobservablefortheassetandliability,eitherdirectlyorindirectly;and



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• Level3inputsareunobservabledatapointsfortheassetorliability,andincludesituationswherethereislittle,ifany,marketactivityfortheassetorliability.

FairvaluemethodologyThefollowingmethodsandassumptionsareusedtoestimatethefairvalueforeachclassofourfinancial

instruments:

ForeigncurrencyandcommodityderivativecontractsThefairvalueisestimatedusingmarket-basedinputs,obtainedfromindependentpricingservices,

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

InterestrateswapandtreasurylockcontractsThefairvalueisestimatedbasedonquotedmarketpricesfromrespectivecounterparties.Quotesare

corroboratedbyusingdiscountedcashflowcalculationsbaseduponforwardinterest-rateyieldcurves,whichareobtainedfromindependentpricingservices(Level2fairvaluemeasurement).

CanopyinvestmentEquitysecurities,Warrants–TheinputsusedtoestimatethefairvalueoftheCanopywarrantsareas

follows:

February28,2021(1)(2) February29,2020(2)

TrancheAWarrants(3)

TrancheBWarrants(4)

TrancheAWarrants(3)

TrancheBWarrants(4)

November2017CanopyWarrants(3)

Exerciseprice(5) C$ 50.40 C$ 76.68 C$ 50.40 C$ 76.68 C$ 12.98

Valuationdatestockprice(6) C$ 41.90 C$ 41.90 C$ 25.17 C$ 25.17 C$ 25.17

Remainingcontractualterm(7) 2.7years 5.7years 3.7years 6.7years 0.2years

Expectedvolatility(8) 70.0% 70.0% 70.0% 70.0% 105.3%

Risk-freeinterestrate(9) 0.5% 1.1% 1.1% 1.1% 1.5%

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

(1) TheNovember2017CanopyWarrantswereexercisedonMay1,2020andassucharenotincludedinthetableasofFebruary28,2021.ForadditionalinformationontheNovember2017CanopyWarrantsandtherelatedexercise,refertoNote10.

(2) TheexercisepricefortheTrancheCWarrantsisbasedontheVWAPExercisePriceandarenotincludedinthetableasthereisnofairvalueassigned.

(3) ThefairvalueisestimatedusingtheBlack-Scholesoption-pricingmodel(Level2fairvaluemeasurement).(4) ThefairvalueisestimatedusingMonteCarlosimulations(Level2fairvaluemeasurement).(5) Basedontheexercisepricefromtheapplicableunderlyingagreements.(6) BasedontheclosingmarketpriceforCanopycommonstockontheTSXasoftheapplicabledate.(7) Basedonthefollowingexpirationdates:

November2017CanopyWarrants May1,2020

TrancheAWarrants November1,2023

TrancheBWarrants November1,2026(8) Basedonconsiderationofhistoricaland/orimpliedvolatilitylevelsoftheunderlyingequitysecurityandlimited

considerationofhistoricalpeergroupvolatilitylevels.



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(9) BasedontheimpliedyieldcurrentlyavailableonCanadianTreasuryzerocouponissueswitharemainingtermequaltotheexpirationdateoftheapplicablewarrants.

(10) Basedonhistoricaldividendlevels.

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

TheinputsusedtoestimatethefairvalueoftheCanopyDebtSecuritiesareasfollows:February28,

2021February29,

2020

Conversionprice(1) C$ 48.17 C$ 48.17

Valuationdatestockprice(2) C$ 41.90 C$ 25.17

Remainingterm(3) 2.4years 3.4years

Expectedvolatility(4) 57.6% 58.2%

Risk-freeinterestrate(5) 0.4% 1.1%

Expecteddividendyield(6) 0.0% 0.0%

(1) BasedontheratewhichtheCanopyDebtSecuritiesmaybeconvertedintoequityshares,ortheequivalentamountofcash,attheoptionoftheissuer.

(2) BasedontheclosingmarketpriceforCanopycommonstockontheTSXasoftheapplicabledate.(3) Basedonthecontractualmaturitydateofthenotes.(4) Basedonhistoricalvolatilitylevelsoftheunderlyingequitysecurity,reducedforcertainrisksassociatedwith

debtsecurities.(5) BasedontheimpliedyieldcurrentlyavailableonCanadianTreasuryzerocouponissueswithatermequaltothe

remainingcontractualtermoftheCanopyDebtSecurities.(6) Basedonhistoricaldividendlevels.

Short-termborrowingsTherevolvingcreditfacilityunderourseniorcreditfacilityisavariableinterestratebearingnotewitha

fixedmargin,adjustablebaseduponourdebtrating(asdefinedinourseniorcreditfacility).ItsfairvalueisestimatedbydiscountingcashflowsusingLIBORplusamarginreflectingcurrentmarketconditionsobtainedfromparticipatingmemberfinancialinstitutions(Level2fairvaluemeasurement).Theremaininginstruments,includingourcommercialpaper,arevariableinterestratebearingnotesforwhichthecarryingvalueapproximatesthefairvalue.

Long-termdebtThetermloanunderourMarch2020TermCreditAgreementisavariableinterestratebearingnotewitha

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

Thecarryingamountsofcertainofourfinancialinstruments,includingcashandcashequivalents,accountsreceivable,accountspayable,andshort-termborrowings,approximatefairvalueasofFebruary28,2021,andFebruary29,2020,duetotherelativelyshortmaturityoftheseinstruments.AsofFebruary28,2021,thecarryingamountoflong-termdebt,includingthecurrentportion,was$10,442.3million,comparedwithan



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estimatedfairvalueof$11,580.9million.AsofFebruary29,2020,thecarryingamountoflong-termdebt,includingthecurrentportion,was$11,945.7million,comparedwithanestimatedfairvalueof$12,935.9million.

RecurringbasismeasurementsThefollowingtablepresentsourfinancialassetsandliabilitiesmeasuredatestimatedfairvalueona

recurringbasis:

February28,2021

Assets:

Foreigncurrencycontracts $ — $ 76.6 $ — $ 76.6

Commodityderivativecontracts $ — $ 21.2 $ — $ 21.2

Equitysecurities(1) $ — $ 1,639.7 $ — $ 1,639.7

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

Liabilities:



February29,2020

Assets:



Equitysecurities(1) $ — $ 991.5 $ — $ 991.5

CanopyDebtSecurities(1) $ — $ 125.6 $ — $ 125.6

Liabilities:



Interestrateswapcontracts $ — $ 0.8 $ — $ 0.8

Treasurylockcontracts $ — $ 7.6 $ — $ 7.6

FairValueMeasurementsUsingQuotedPricesinActiveMarkets(Level1)

SignificantOther

ObservableInputs(Level2)

SignificantUnobservable

Inputs(Level3) Total

(inmillions)

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

February28,2021

February29,2020

(inmillions)

November2017CanopyWarrants(i) (61.8) (543.7)

November2018CanopyWarrants(ii)

823.3 (1,488.1)

CanopyDebtSecurities 40.5 (94.6)

$ 802.0 $ (2,126.4)

(i) TheNovember2017CanopyWarrantswereexercisedinMay2020.ForadditionalinformationontheNovember2017CanopyWarrantsandtherelatedexercise,refertoNote10.

(ii) ThetermsoftheNovember2018CanopyWarrantsweremodifiedinJune2019.ForadditionalinformationontheNovember2018CanopyWarrantsandtherelatedmodification,refertoNote10.FortheyearendedFebruary29,2020,amountsarenetofa$1,176.0millionunrealizedgainresultingfromtheJune2019WarrantModification.



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NonrecurringbasismeasurementsThefollowingtablepresentsourassetsandliabilitiesmeasuredatestimatedfairvalueonanonrecurring

basisforwhichanimpairmentassessmentwasperformedfortheperiodspresented:


Long-livedassetsheldforsale $ — $ — $ — $ 24.0

Trademarks — — 4.0 6.0

$ — $ — $ 4.0 $ 30.0


Long-livedassetsheldforsale $ — $ — $ 949.3 $ 449.7

Trademarks(1) — — — 11.0

$ — $ — $ 949.3 $ 460.7


Trademarks $ — $ — $ 28.0 $ 108.0

FairValueMeasurementsUsing

QuotedPricesinActiveMarkets(Level1)

SignificantOther

ObservableInputs(Level2)

SignificantUnobservable

Inputs(Level3) TotalLosses

(inmillions)

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

Long-livedassetsheldforsaleFortheyearendedFebruary28,2021,primarilyinconnectionwiththeWineandSpiritsDivestituresand

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

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

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



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includedinourbeerreportingunitthroughthedateofdivestiture.Accordingly,goodwillwasallocatedtotheBallastPointassetsheldforsalebasedontherelativefairvalueofthebusinessbeingsoldcomparedtotherelativefairvalueofthereportingunit.GoodwillnotallocatedtoassetsassociatedwiththeBallastPointDivestitureremainedinthebeerreportingunit.

TrademarksFortheyearendedFebruary28,2021,certainnegativetrendswithinourBeersegment’sFourCorners

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

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

FortheyearendedFebruary28,2019,inconnectionwithcertaincontinuingnegativetrendswithinourBeersegment’sBallastPointcraftbeerportfolio,includingslowergrowthratesandincreasedcompetition,weimplementedachangeinstrategyforourBallastPointcraftbeerportfolio.Thischangeinstrategy,whencombinedwiththecontinuingnegativetrends,indicatedthatitwasmorelikelythannotthefairvalueofourindefinite-livedintangibleassetassociatedwiththecraftbeertrademarkmightbebelowitscarryingvalue.ThechangeinstrategyforourBallastPointcraftbeerportfoliofocusesonimprovingprofitabilitybyrationalizingthenumberofproductofferingswhiletargetingdistributiongrowthinselectstrategicmarkets.Thischangeinstrategyresultedinupdatedlong-termfinancialforecastswithlowerrevenues,andcashflowsfortherelatedportfolio.Accordingly,weperformedaquantitativeassessmentforimpairmentoftheBallastPointcraftbeertrademarkasset.Asaresultofthisassessment,theBallastPointcraftbeertrademarkassetwithacarryingvalueof$136.0millionwaswrittendowntoitsestimatedfairvalueof$28.0million,resultinginanimpairmentof$108.0million.

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



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8. GOODWILL

Thechangesinthecarryingamountofgoodwillareasfollows:


(inmillions)

Balance,February28,2019 $ 5,167.9 $ 2,920.9 $ 8,088.8

Purchaseaccountingallocations(1) — 58.8 58.8

BlackVelvetDivestiture — (72.2) (72.2)

Foreigncurrencytranslationadjustments 0.2 (9.5) (9.3)

Reclassified(to)fromassetsheldforsale(2) (4.7) (304.3) (309.0)

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

Purchaseaccountingallocations(3) — 14.3 14.3

Foreigncurrencytranslationadjustments (38.7) 15.9 (22.8)

Reclassified(to)fromassetsheldforsale(2) 0.9 44.0 44.9

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

(1) PurchaseaccountingallocationsassociatedprimarilywiththeacquisitionofNelson’sGreenBrier.(2) PrimarilyinconnectionwiththeWineandSpiritsDivestitures,goodwillassociatedwiththebusinessesbeingsold

wasreclassified(to)fromassetsheldforsalebasedontherelativefairvaluesoftheportionofthebusinessbeingsoldandtheremainingwineandspiritsandbeerportfolios.Therelativefairvaluesweredeterminedusingtheincomeapproachbasedonassumptions,includingprojectedrevenuegrowthrates,terminalgrowthrate,anddiscountrateandotherprojectedfinancialinformation.

(3) PreliminarypurchaseaccountingallocationsassociatedprimarilywiththeacquisitionofEmpathyWines.

9. INTANGIBLEASSETS

Themajorcomponentsofintangibleassetsareasfollows:

February28,2021 February29,2020Gross

CarryingAmount

NetCarryingAmount

GrossCarryingAmount

NetCarryingAmount

(inmillions)

AmortizableintangibleassetsCustomerrelationships $ 87.2 $ 26.3 $ 87.4 $ 31.8Other 21.1 0.2 20.2 0.3

Total $ 108.3 26.5 $ 107.6 32.1

NonamortizableintangibleassetsTrademarks 2,705.6 2,686.8

Totalintangibleassets $ 2,732.1 $ 2,718.9

TheintangibleassetsbalanceatFebruary29,2020,excludesintangibleassetsreclassifiedtoassetsheldforsale,whichconsistprimarilyoftrademarks.WedidnotincurcoststoreneworextendthetermofacquiredintangibleassetsfortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019.Netcarryingamountrepresentsthegrosscarryingvaluenetofaccumulatedamortization.Amortizationexpenseforintangibleassetswas$5.3million,$5.7million,and$6.0millionfortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019,respectively.



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Estimatedamortizationexpenseforeachofthefivesucceedingfiscalyearsandthereafterisasfollows:

(inmillions)

2022 $ 5.1

2023 $ 3.2

2024 $ 1.4

2025 $ 1.4

2026 $ 1.4

Thereafter $ 14.0

10. EQUITYMETHODINVESTMENTS

Ourequitymethodinvestmentsareasfollows:

February28,2021 February29,2020

CarryingValueOwnershipPercentage CarryingValue

OwnershipPercentage

(inmillions)

CanopyEquityMethodInvestment $ 2,578.8 38.1% $ 2,911.7 35.3%

Otherequitymethodinvestments(1) 209.6 20%-50% 182.2 20%-50%

$ 2,788.4 $ 3,093.9

(1) TheotherequitymethodinvestmentsbalanceatFebruary29,2020,excludesinvestmentsreclassifiedtoassetsheldforsale.

CanopyEquityMethodInvestmentInNovember2017,weacquired18.9millioncommonshares,whichrepresenteda9.9%ownership

interestinCanopy,anOntario,Canada-basedpubliccompanyandleadingproviderofmedicinalandrecreationalcannabisproducts,pluswarrantswhichgaveustheoptiontopurchaseanadditional18.9millioncommonsharesofCanopy.TheNovember2017CanopyInvestmentwasaccountedforatfairvaluefromthedateofinvestmentthroughOctober31,2018.FromNovember1,2018,theNovember2017CanopyInvestmenthasbeenaccountedforundertheequitymethod.TheNovember2017CanopyWarrantswereaccountedforatfairvaluefromthedateofinvestmentthroughApril30,2020.See“May2020CanopyInvestment”and“CanopyEquityMethodInvestment”below.

InNovember2018,weincreasedourownershipinterestinCanopybyacquiringanadditional104.5millioncommonshares(see“CanopyEquityMethodInvestment”below),pluswarrantswhichgiveustheoptiontopurchaseanadditional139.7millioncommonsharesofCanopyforC$5,078.7million,or$3,869.9million.OnNovember1,2018,ourownershipinterestinCanopyincreasedto36.6%whichallowedustoexercisesignificantinfluence,butnotcontrol,overCanopy.

InMay2020,weexercisedtheNovember2017CanopyWarrantsatanexercisepriceofC$12.98perwarrantshareforC$245.0million,or$173.9million.TheMay2020CanopyInvestmentincreasedourownershipinterestinCanopyto38.6%uponexercise.WeenteredintoforeigncurrencyforwardcontractstofixtheU.S.dollarcostoftheMay2020CanopyInvestment.FortheyearendedFebruary28,2021,werecognizednetlossesontheforeigncurrencyforwardcontractsof$7.5million,inselling,general,andadministrativeexpenseswithinourconsolidatedresultsofoperations.ThepaymentatmaturityofthederivativeinstrumentsisreportedascashflowsfrominvestingactivitiesininvestmentsinequitymethodinvesteesandsecuritiesfortheyearendedFebruary28,2021.

WeaccountfortheNovember2017CanopyInvestment,theNovember2018CanopyInvestment,andtheMay2020CanopyInvestment,eachofwhichrepresentsaninvestmentincommonsharesofCanopy,collectively,undertheequitymethod.Equityinearnings(losses)fromtheCanopyEquityMethodInvestmentandrelatedactivities(seetablebelow)include,amongotheritems,restructuringandotherstrategicbusinessdevelopment



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costs,theamortizationofthefairvalueadjustmentsassociatedwiththedefinite-livedintangibleassetsovertheirestimatedusefullives,theflowthroughofinventorystep-up,unrealizedgains(losses)associatedwithchangesinourCanopyownershippercentageresultingfromperiodicequityissuancesmadebyCanopy,andourshareofCanopy’sadditionallossresultingfromtheJune2019WarrantModificationof$409.0million.

Amountsincludedinourconsolidatedresultsofoperationsforeachperiodareasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

Equityinearnings(losses)fromCanopyandrelatedactivities $ (679.0) $ (575.9) $ (2.6)

InJune2019,theCanopyshareholdersapprovedthemodificationofthetermsofthewarrantsoriginallyobtainedinNovember2018andcertainotherrights,andtheotherrequiredapprovalsnecessaryforthemodificationstobeeffectiveweregranted.TheNovember2018CanopyWarrantsnowconsistofthreetranchesofwarrants,including88.5millionTrancheAWarrantsexpiringNovember1,2023whicharecurrentlyexercisable,38.4millionTrancheBWarrantsexpiringNovember1,2026,and12.8millionTrancheCWarrantsexpiringNovember1,2026.ThesechangesaretheresultofCanopy’sintentiontoacquireAcreageuponU.S.federalcannabislegalization,subjecttocertainconditions.InconnectionwiththeAcreageTransaction,Canopyhadacalloptiontoacquire100%ofthesharesofAcreage.

TheotherrightsobtainedinJune2019inconnectionwiththeAcreageTransactionincludeasharerepurchasecreditandtheabilitytopurchaseCanopycommonsharesontheopenmarketorinprivateagreementtransactions.IfCanopyhasnotpurchasedthelesserof27,378,866Canopycommonshares,orC$1,583.0millionworthofCanopycommonsharesforcancellationbetweenApril18,2019andtwo-yearsafterthefullexerciseoftheTrancheAWarrants,wewillbecreditedanamountthatwillreducetheaggregateexercisepriceotherwisepayableuponeachexerciseoftheTrancheBWarrantsandTrancheCWarrants.ThecreditwillbeanamountequaltothedifferencebetweenC$1,583.0millionandtheactualpricepaidbyCanopyinpurchasingitscommonsharesforcancellation.IfwechoosetopurchaseCanopycommonsharesontheopenmarketorinprivateagreementwithexistingholders,thenumberofTrancheBWarrantsorTrancheCWarrantsshallbedecreasedbyoneforeachCanopycommonshareacquired,uptoanaggregatemaximumreductionof20millionwarrants.ThelikelihoodofreceivingthesharerepurchasecreditifweweretofullyexercisetheTrancheAWarrantsisremote,therefore,nofairvaluehasbeenassigned.

TheinputsusedtoestimatethefairvalueoftheNovember2018CanopyWarrantsasoftheJune27,2019modificationdate,wereasfollows:

TrancheAWarrants(1)

TrancheBWarrants(1)

Exerciseprice $ 50.40 $ 76.68

Valuationdatestockprice $ 53.36 $ 53.36

Remainingcontractualterm 4.3years 7.3years

Expectedvolatility 66.7% 66.7%

Risk-freeinterestrate 1.4% 1.4%

Expecteddividendyield 0.0% 0.0%

(1) RefertoNote7forinputdescriptions.

Accordingly,werecognizeda$1,176.0millionunrealizedgainfromunconsolidatedinvestmentswithinourconsolidatedresultsofoperationsforthesecondquarteroffiscal2020fromtheJune2019WarrantModification.Approximately$322.5millionoftheunrealizedgainwasassociatedwiththeTrancheAWarrantsand$853.5millionwasassociatedwiththeTrancheBWarrants.NovaluewasassociatedwiththeTrancheCWarrantsastheyhaveaVWAPExercisePrice.



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InSeptember2020,theAcreageshareholdersapprovedthemodificationoftheAcreageTransactionandrelatedAcreageFinancialInstrument,andtheotherrequiredregulatoryapprovalsnecessaryforthemodificationtobeeffectiveweregranted.TheNewAcreageAgreementreduces(i)theratioofCanopysharesrequiredtobeexchangedforAcreagesharesuponU.S.federalcannabislegalizationand(ii)thenumberofAcreagesharessubjecttothefixedexchangeratiofrom100%to70%,calculatedasapercentageofAcreage’sissuedandoutstandingshares.Theremaining30%ofAcreageshareswillbesubjecttoafloatingexchangeratioandCanopy,atitssolediscretion,willhavetheoptiontoacquiretheseshareswithCanopyshares,cash,oracombinationthereof.

InFebruary2021,CanopysolditsownershipinterestinRIVCapitalinexchangefor(i)exchangeableshares,warrants,anddebtinTerrAscendCorp.,(ii)sharesinLesSerresVertCannabisInc.,and(iii)theterminationofaroyaltyagreementwithTheTweedTreeLotInc.Asadditionalconsiderationfortheassetsbeingtransferredandterminationoftheroyaltyagreement,CanopymadeacashpaymentofC$115millionandissued3,647,902Canopyshares.TheRIVCapitalDivestiturehasaminordilutiveimpactonourownershipinterestinCanopywhichwewillreflectinourfirstquarteroffiscal2022results.

Canopyhasvariousequityandconvertibledebtsecuritiesoutstanding,includingprimarilyequityawardsgrantedtoitsemployees,andoptionsandwarrantsissuedtovariousthirdparties,includingourNovember2018CanopyWarrants,CanopyDebtSecurities,andtheNewAcreageFinancialInstrument.AsofFebruary28,2021,theconversionofCanopyequitysecuritiesheldbyitsemployeesand/orheldbyotherthirdparties,excludingourNovember2018CanopyWarrants,CanopyDebtSecurities,andtheNewAcreageFinancialInstrument,wouldnothaveasignificanteffectonourshareofCanopy’sreportedearningsorlosses.Additionally,underanamendedandrestatedinvestorrightsagreement,wehavetheoptiontopurchaseadditionalcommonsharesofCanopyatthethen-currentpriceoftheunderlyingequitysecuritytoallowustomaintainourrelativeownershipinterest.IfweexercisedallofourNovember2018CanopyWarrants,itcouldhaveasignificanteffectonourshareofCanopy’sreportedearningsorlossesandourownershipinterestinCanopywouldbeexpectedtoincreasetogreaterthan50%.IfCanopyexercisedtheNewAcreageFinancialInstrument,whichwouldrequiretheissuanceofCanopyshares,itcouldhaveasignificanteffectonourshareofCanopy’sreportedearningsorlossesandourownershipinterestinCanopywoulddecreaseandnolongerbeexpectedtobegreaterthan50%.

AsofFebruary28,2021,theexerciseofallCanopywarrantsheldbyuswouldhaverequiredacashoutflowofapproximately$6.3billionbasedonthetermsoftheNovember2018CanopyWarrants.Additionally,asofFebruary28,2021,thefairvalueoftheCanopyEquityMethodInvestmentwas$4,679.3millionbasedontheclosingpriceoftheunderlyingequitysecurityasofthatdate.

ThefollowingtablespresentsummarizedfinancialinformationforCanopypreparedinaccordancewithU.S.GAAP.Werecognizeourequityinearnings(losses)forCanopyonatwo-monthlag.Accordingly,werecognizedourshareofCanopy’searnings(losses)fortheperiods(i)JanuarythroughDecember2020inouryearendedFebruary28,2021results,(ii)JanuarythroughDecember2019inouryearendedFebruary29,2020,results,and(iii)NovemberandDecember2018,inouryearendedFebruary28,2019results.Theamountsshownrepresent100%ofCanopy’sfinancialpositionandresultsofoperations,fortherespectiveperiods,however,theresultsofoperationsfortheyearendedFebruary29,2020,excludetheimpactoftheJune2019WarrantModificationLossbecauseitwasrecordedbyCanopywithinequity.TheyearendedFebruary28,2021,includescostsdesignedtoimproveCanopy’sorganizationalfocus,streamlineoperations,andalignproductioncapabilitywithprojecteddemand.

February28,2021

February29,2020

(inmillions)

Currentassets $ 1,706.6 $ 2,232.9

Noncurrentassets $ 3,251.5 $ 3,751.6

Currentliabilities $ 273.7 $ 322.0

Noncurrentliabilities $ 1,308.8 $ 867.9

Noncontrollinginterests $ 179.0 $ 210.5



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FortheYearsEnded

February28,2021

February29,2020

February28,2019(1)

(inmillions)

Netsales $ 378.6 $ 290.2 $ 48.6

Grossprofit(loss) $ (14.1) $ 45.4 $ 11.2

Netincome(loss) $ (1,775.3) $ (327.0) $ (39.6)

Netincome(loss)attributabletoCanopy $ (1,750.0) $ (312.6) $ (27.8)

(1) FortheperiodNovember1,2018,throughDecember31,2018.

OtherequitymethodinvestmentBookerVineyardInApril2020,weinvestedinMyFavoriteNeighbor,LLC,alsoknownasBookerVineyard,asuper-luxury,

direct-to-consumerfocusedwinebusinesswhichweaccountforundertheequitymethod.Werecognizeourshareoftheirequityinearnings(losses)inourconsolidatedfinancialstatementsintheWineandSpiritssegment.

11. OTHERACCRUEDEXPENSESANDLIABILITIES

Themajorcomponentsofotheraccruedexpensesandliabilitiesareasfollows:

February28,2021

February29,2020

(inmillions)

Salaries,commissions,andpayrollbenefitsandwithholdings $ 232.1 $ 182.2

Promotionsandadvertising 159.9 191.7

Accruedinterest 93.4 94.3

Operatingleaseliability 68.8 76.6

Incometaxespayable 24.7 24.9

Derivativeliabilities 10.9 61.1

Other 190.1 149.6

$ 779.9 $ 780.4

12. BORROWINGS

Borrowingsconsistofthefollowing:

February28,2021February29,

2020

Current Long-term Total Total

(inmillions)

Short-termborrowings

Commercialpaper $ — $ 238.9

$ — $ 238.9

Long-termdebt

Termloancreditfacilities $ 24.6 $ 429.8 $ 454.4 $ 1,295.7

Seniornotes — 9,972.4 9,972.4 10,624.7

Other 4.6 10.9 15.5 25.3

$ 29.2 $ 10,413.1 $ 10,442.3 $ 11,945.7



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BankfacilitiesSeniorcreditfacilityInAugust2018,theCompany,CIH,CBInternational,certainoftheCompany’ssubsidiariesasguarantors,

theAdministrativeAgent,andcertainotherlendersenteredintotheAugust2018RestatementAgreementthatamendedandrestatedourthen-existingseniorcreditfacility(asamendedandrestatedbytheAugust2018RestatementAgreement,theAugust2018CreditAgreement).TheprincipalchangeseffectedbytheAugust2018RestatementAgreementwere:

• theremovalofCIHasaborrowerundertheAugust2018CreditAgreement;• theterminationofacross-guaranteeagreementbyCIHandCBInternational;and• theadditionofamechanismtoprovideforthereplacementofLIBORwithanalternativebenchmark

rateincertaincircumstanceswhereLIBORcannotbeadequatelyascertainedoravailable.

InSeptember2018,theCompany,CBInternational,certainoftheCompany’ssubsidiariesasguarantors,theAdministrativeAgent,andcertainotherlendersenteredintothe2018RestatementAgreementthatamendedandrestatedtheAugust2018CreditAgreement(asamendedandrestatedbythe2018RestatementAgreement,the2018CreditAgreement).Theprimarychangeeffectedbythe2018RestatementAgreementwastheincreaseoftherevolvingcreditfacilityfrom$1.5billionto$2.0billionandextensionofitsmaturitytoSeptember14,2023.The2018RestatementAgreementalsomodifiedcertainfinancialcovenantsinconnectionwiththeNovember2018CanopyTransactionandaddedvariousrepresentationsandwarranties,covenants,andaneventofdefaultrelatedtotheNovember2018CanopyTransaction.

InJune2019,werepaidtheoutstandingobligationsundertheU.S.TermA-1loanfacilityunderthe2018CreditAgreementwithproceedsfromthe2019TermCreditAgreement.

InMarch2020,theCompany,CBInternational,certainoftheCompany’ssubsidiariesasguarantors,theAdministrativeAgent,andcertainotherlendersenteredintothe2020RestatementAgreementthatamendedandrestatedthe2018CreditAgreement(asamendedandrestatedbythe2020RestatementAgreement,the2020CreditAgreement).The2020CreditAgreementprovidesforanaggregaterevolvingcreditfacilityof$2.0billion.Theprincipalchangeseffectedbythe2020RestatementAgreementwere:

• theremovalofthesubsidiaryguaranteesandterminationoftheguaranteeagreement;• theinclusionoftheparentguarantyprovisionsinconnectionwiththeterminationoftheguarantee

agreement;• theremovalofcertainprovisionspertainingtotermloanssincenotermloansareoutstanding;and• therevisionoftheLIBORsuccessorrateprovisionstopermittheuseofratesbasedontheSOFR

administeredbytheFederalReserveBankofNewYork.

Uponremovalofallsubsidiaryguarantorsfromour2020CreditAgreement,thesubsidiaryguarantorswereautomaticallyreleasedfromtheindenturesrelatingtoouroutstandingseniornotes.

2020TermCreditAgreementInSeptember2018,theCompany,theAdministrativeAgent,andcertainotherlendersenteredintothe

TermCreditAgreement.TheTermCreditAgreementprovidedforaggregatecreditfacilitiesof$1.5billion,consistingofthe$500.0millionthree-yeartermloanfacilityanda$1.0billionfive-yeartermloanfacility.

InMarch2020,theCompany,certainoftheCompany’ssubsidiariesasguarantors,theAdministrativeAgent,andcertainotherlendersenteredintotheTermLoanRestatementAgreementthatamendedandrestatedtheTermCreditAgreement(asamendedandrestatedbytheTermLoanRestatementAgreement,the2020TermCreditAgreement).TheprincipalchangeseffectedbytheTermLoanRestatementAgreementwere:

• theremovalofthesubsidiaryguaranteesandterminationoftherespectiveguaranteeagreements;and

• therevisionoftheLIBORsuccessorrateprovisionstopermittheuseofratesbasedonSOFR.



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InAugust2020,weprepaidtheoutstandingThree-YearTermFacilityborrowingsandinJuly2020,weprepaidtheoutstandingFive-YearTermFacilityborrowings,bothunderour2020TermCreditAgreement.

March2020TermCreditAgreementInJune2019,theCompanyandtheAdministrativeAgentandLenderenteredintothe2019TermCredit

Agreement.The2019TermCreditAgreementprovidesforthecreationofa$491.3millionfive-yeartermloanfacility.The2019Five-YearTermFacilitywillberepaidinquarterlypaymentsofprincipalequalto1.25%oftheoriginalaggregateprincipalamountofthe2019Five-YearTermFacility,withthebalancedueandpayableatmaturity.

InMarch2020,theCompany,certainoftheCompany’ssubsidiariesasguarantors,andtheLenderenteredintothe2020TermLoanRestatementAgreementthatamendedandrestatedthe2019TermCreditAgreement(asamendedandrestatedbythe2020TermLoanRestatementAgreement,theMarch2020TermCreditAgreement).Theprincipalchangeseffectedbythe2020TermLoanRestatementAgreementwere:

• theremovalofthesubsidiaryguaranteesandterminationoftherespectiveguaranteeagreements;and

• therevisionoftheLIBORsuccessorrateprovisionstopermittheuseofratesbasedonSOFR.

GeneralWeandoursubsidiariesaresubjecttocovenantsthatarecontainedinthe2020CreditAgreementandthe

March2020TermCreditAgreement,includingthoserestrictingtheincurrenceofadditionalindebtedness,additionalliens,mergersandconsolidations,transactionswithaffiliates,andsaleandleasebacktransactions,ineachcasesubjecttonumerousconditions,exceptions,andthresholds.Thefinancialcovenantsarelimitedtoaminimuminterestcoverageratioandamaximumnetleverageratio.

Ourseniorcreditfacilitypermitsustoelect,subjecttothewillingnessofexistingornewlenderstofundsuchincreaseortermloansandothercustomaryconditions,toincreasetherevolvingcreditcommitmentsoraddoneormoretranchesofadditionaltermloans.TheIncrementalFacilitiesmaybeanunlimitedamountsolongasourleverageratio,asdefinedandcomputedpursuanttoourseniorcreditfacility,isnogreaterthan4.00to1.00subjecttocertainlimitationsfortheperioddefinedpursuanttoourseniorcreditfacility.

AsofFebruary28,2021,aggregatecreditfacilitiesunderthe2020CreditAgreementandtheMarch2020TermCreditAgreementconsistofthefollowing:

Amount Maturity

(inmillions)

2020CreditAgreement

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

March2020TermCreditAgreement

2019Five-YearTermFacility(1)(3) $ 491.3 Jun28,2024

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

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

(3) Wearetheborrowerunderthe2019Five-YearTermFacility.



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AsofFebruary28,2021,informationwithrespecttoborrowingsunderthe2020CreditAgreementandtheMarch2020TermCreditAgreementisasfollows:

2020CreditAgreement

March2020TermCreditAgreement

Revolvingcreditfacility

2019Five-YearTermFacility(1)

(inmillions)

Outstandingborrowings $ — $ 454.4

Interestrate —% 1.0%

LIBORmargin —% 0.88%

Outstandinglettersofcredit $ 11.7

Remainingborrowingcapacity(2) $ 1,988.3

(1) Outstandingtermloanfacilityborrowingsarenetofunamortizeddebtissuancecosts.(2) Netofoutstandingrevolvingcreditfacilityborrowings,outstandinglettersofcreditunderthe2020Credit

Agreement,andoutstandingborrowingsunderourcommercialpaperprogram(excludingunamortizeddiscount)(see“Commercialpaperprogram”).

CommercialpaperprogramWehaveacommercialpaperprogramwhichprovidesfortheissuanceofuptoanaggregateprincipal

amountof$2.0billionofcommercialpaper.Ourcommercialpaperprogramisbackedbyunusedcommitmentsunderourrevolvingcreditfacilityunderour2020CreditAgreement.Accordingly,outstandingborrowingsunderourcommercialpaperprogramreducetheamountavailableunderourrevolvingcreditfacilityunderour2020CreditAgreement.AsofFebruary28,2021,wehadnooutstandingborrowingsunderourcommercialpaperprogram.InformationwithrespecttoouroutstandingcommercialpaperborrowingsasofFebruary29,2020,isasfollows:

(inmillions)

Outstandingborrowings(1) $ 238.9

Weightedaverageannualinterestrate 1.9%

Weightedaverageremainingterm 8days

(1) Outstandingcommercialpaperborrowingsarenetofunamortizeddiscount.

InterestrateswapcontractsInJune2019,weenteredintointerestrateswapagreements,whichweredesignatedascashflowhedges

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

TreasurylockcontractsInFebruaryandMarch2020,weenteredintotreasurylockagreements,whichweredesignatedascash

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



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SeniornotesOuroutstandingseniornotesareasfollows:

3.75%SeniorNotes(2)(3) $ 500.0 May2013 May2021 May/Nov $ — $ 499.2

4.25%SeniorNotes(2)(4) $ 1,050.0 May2013 May2023 May/Nov 1,047.5 1,046.4

4.75%SeniorNotes(2)(4) $ 400.0 Nov2014 Nov2024 May/Nov 397.6 397.0

4.75%SeniorNotes(2)(4) $ 400.0 Dec2015 Dec2025 Jun/Dec 396.9 396.3

3.70%SeniorNotes(2)(5) $ 600.0 Dec2016 Dec2026 Jun/Dec 596.5 595.9

2.70%SeniorNotes(2)(5) $ 500.0 May2017 May2022 May/Nov 498.8 497.8



2.25%SeniorNotes(2)(6) $ 700.0 Nov2017 Nov2020 May/Nov — 698.7

2.65%SeniorNotes(2)(5) $ 700.0 Nov2017 Nov2022 May/Nov 697.1 695.5

3.20%SeniorNotes(2)(5) $ 600.0 Feb2018 Feb2023 Feb/Aug 598.0 597.0



SeniorFloatingRateNotes(2)(7) $ 650.0 Oct2018 Nov2021 Quarterly — 647.9

4.40%SeniorNotes(2)(5) $ 500.0 Oct2018 Nov2025 May/Nov 496.6 496.0



3.15%SeniorNotes(2)(5) $ 800.0 Jul2019 Aug2029 Feb/Aug 793.9 793.3

2.875%SeniorNotes(2)(5) $ 600.0 Apr2020 May2030 May/Nov 594.3 —

3.75%SeniorNotes(2)(5) $ 600.0 Apr2020 May2050 May/Nov 589.6 —

$ 9,972.4 $ 10,624.7

Dateof OutstandingBalance(1)

Principal Issuance MaturityInterestPayments

February28,2021

February29,2020

(inmillions)

(1) Amountsarenetofunamortizeddebtissuancecostsandunamortizeddiscounts,whereapplicable.(2) Seniorunsecuredobligationswhichrankequallyinrightofpaymenttoallofourexistingandfuturesenior

unsecuredindebtedness.(3) RedeemedpriortomaturityinFebruary2021ataredemptionpriceequalto100%oftheoutstandingprincipal

amount,plusaccruedandunpaidinterestandamake-wholepaymentof$3.8million.Themake-wholepaymentisincludedinlossonextinguishmentofdebtwithinourconsolidatedresultsofoperations.

(4) Redeemable,inwholeorinpart,atouroptionatanytimeataredemptionpriceequalto100%oftheoutstandingprincipalamount,plusaccruedandunpaidinterestandamake-wholepaymentbasedonthepresentvalueofthefuturepaymentsattheadjustedTreasuryRateplus50basispoints.

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

Redemption

StatedRedemption

Date

StatedBasisPoints

3.70%SeniorNotesdueDecember2026 Sept2026 25

2.70%SeniorNotesdueMay2022 Apr2022 15



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3.50%SeniorNotesdueMay2027 Feb2027 20

4.50%SeniorNotesdueMay2047 Nov2046 25

2.65%SeniorNotesdueNovember2022 Oct2022 15

3.20%SeniorNotesdueFebruary2023 Jan2023 13

3.60%SeniorNotesdueFebruary2028 Nov2027 15

4.10%SeniorNotesdueFebruary2048 Aug2047 20

4.40%SeniorNotesdueNovember2025 Sept2025 20

4.65%SeniorNotesdueNovember2028 Aug2028 25

5.25%SeniorNotesdueNovember2048 May2048 30

3.15%SeniorNotesdueAugust2029 May2029 20

2.875%SeniorNotesdueMay2030 Feb2030 35

3.75%SeniorNotesdueMay2050 Nov2049 40(6) RedeemedpriortomaturityinMay2020ataredemptionpriceequalto100%oftheoutstandingprincipal

amount,plusaccruedandunpaidinterestandamake-wholepaymentof$6.2million.Themake-wholepaymentisincludedinlossonextinguishmentofdebtwithinourconsolidatedresultsofoperations.

(7) RedeemedpriortomaturityinNovember2020ataredemptionpriceequalto100%oftheoutstandingprincipalamount,plusaccruedandunpaidinterest.

IndenturesOurindenturesrelatingtoouroutstandingseniornotescontaincertaincovenants,including,butnot

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

SubsidiarycreditfacilitiesGeneralWehaveadditionalcreditarrangementstotaling$61.2millionand$71.8millionasofFebruary28,2021,

andFebruary29,2020,respectively.AsofFebruary28,2021,andFebruary29,2020,amountsoutstandingunderthesearrangementswere$15.5millionand$25.3million,respectively,themajorityofwhichisclassifiedaslong-termasoftherespectivedate.Thesearrangementsprimarilysupportthefinancingneedsofourdomesticandforeignsubsidiaryoperations(see“Otherlong-termdebt”foradditionalinformation).Interestratesandothertermsoftheseborrowingsvaryfromcountrytocountry,dependingonlocalmarketconditions.

Otherlong-termdebtDuringtheyearendedFebruary28,2019,werecordedaconversionof$248.2millionfromlong-termdebt

tononcontrollingequityinterestsassociatedwiththenoncashsettlementofapriorcontractualagreementwithourglassproductionplantjointventurepartner,Owens-Illinois.

DebtpaymentsAsofFebruary28,2021,therequiredprincipalrepaymentsunderlong-termdebtobligations(excluding

unamortizeddebtissuancecostsandunamortizeddiscountsof$60.6millionand$17.0million,respectively)foreachofthefivesucceedingfiscalyearsandthereafterareasfollows:

(inmillions)

2022 $ 29.2

2023 1,829.2

2024 1,078.7

2025 782.8

2026 900.0

Thereafter 5,900.0

$ 10,519.9



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13. INCOMETAXES

Income(loss)beforeincometaxeswasgeneratedasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

Domestic $ 495.2 $ (2,230.1) $ 1,615.9

Foreign 2,047.7 1,284.9 2,529.1

$ 2,542.9 $ (945.2) $ 4,145.0

Theincometaxprovision(benefit)consistedofthefollowing:

Current

Federal $ 74.0 $ 66.5 $ 4.1

State 19.1 12.1 15.7

Foreign 81.6 108.5 239.2

Totalcurrent 174.7 187.1 259.0

Deferred

Federal 152.8 (459.9) 223.9

State 28.3 (118.3) 75.0

Foreign 155.3 (575.5) 128.0

Totaldeferred 336.4 (1,153.7) 426.9

Incometaxprovision(benefit) $ 511.1 $ (966.6) $ 685.9

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)



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

FortheYearsEnded

February28,2021 February29,2020 February28,2019

Amount

%ofPretaxIncome(Loss) Amount

%ofPretaxIncome(Loss) Amount

%ofPretaxIncome(Loss)

(inmillions,except%ofpretaxincome(loss)data)

Incometaxprovision(benefit)atstatutoryrate $ 534.0 21.0% $ (198.5) 21.0% $ 870.5 21.0%

Stateandlocalincometaxes,netoffederalincometaxbenefit(1) 39.0 1.5% (82.3) 8.7% 81.3 2.0%

Netincometaxprovision(benefit)fromlegislativechanges(2) 10.9 0.4% (547.4) 57.9% (37.6) (0.9%)

EarningstaxedatotherthanU.S.statutoryrate(3) (84.4) (3.2%) (46.5) 5.0% (81.0) (1.9%)

Excesstaxbenefitsfromstock-basedcompensationawards(4) (29.4) (1.2%) (56.2) 5.9% (82.9) (2.0%)

Netincometaxprovision(benefit)recognizedforadjustmenttovaluationallowance 27.1 1.1% (32.8) 3.5% (74.1) (1.8%)

Miscellaneousitems,net 13.9 0.5% (2.9) 0.3% 9.7 0.1%

Incometaxprovision(benefit)ateffectiverate $ 511.1 20.1% $ (966.6) 102.3% $ 685.9 16.5%

(1) Includesdifferencesresultingfromadjustmentstothecurrentanddeferredstateeffectivetaxrates.(2) TheyearendedFebruary28,2021,representsanetincometax(provision)benefitresultingfrominitiatives

undertheCARESAct.TheyearendedFebruary29,2020,representstherecognitionofanetincometaxbenefitresultingfromtheremeasurementofourdeferredtaxassetsinconnectionwiththeSeptember2019enactmentoftaxreforminSwitzerland.TheyearendedFebruary28,2019,representstherecognitionofanetincometaxbenefitrelatedtotheTCJAct.

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

(4) Representstherecognitionoftheincometaxeffectofstock-basedcompensationawardsintheincomestatementwhentheawardsvestoraresettled.

Deferredtaxassetsandliabilitiesreflectthefutureincometaxeffectsoftemporarydifferencesbetweenthefinancialstatementcarryingamountsofexistingassetsandliabilitiesandtheirrespectivetaxbasesandaremeasuredusingenactedtaxratesthatapplytotaxableincome.



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Significantcomponentsofdeferredtaxassets(liabilities)consistofthefollowing:

Deferredtaxassets

Intangibleassets $ 1,852.0 $ 2,045.8

Losscarryforwards 233.1 225.9

Stock-basedcompensation 30.1 75.6

Leaseliabilities 83.1 89.2

Inventory 26.6 32.4

Investmentsinunconsolidatedinvestees 36.7 106.1

Otheraccruals 33.7 35.0

Grossdeferredtaxassets 2,295.3 2,610.0

Valuationallowances (78.6) (54.1)

Deferredtaxassets,net 2,216.7 2,555.9

Deferredtaxliabilities

Property,plant,andequipment (200.3) (175.5)

Provisionforunremittedearnings (23.0) (27.5)

Right-of-useassets (70.6) (80.5)

Totaldeferredtaxliabilities (293.9) (283.5)

Deferredtaxassets(liabilities),net $ 1,922.8 $ 2,272.4

February28,2021

February29,2020

(inmillions)

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

AsofFebruary28,2021,operatinglosscarryforwards,whichareprimarilystateandforeign,totaling$1.6billionarebeingcarriedforwardinanumberofjurisdictionswherewearepermittedtousetaxoperatinglossesfrompriorperiodstoreducefuturetaxableincome.Oftheseoperatinglosscarryforwards,$1.2billionwillexpirebyfiscal2027,$344.1millionwillexpirebetweenfiscal2028andfiscal2041,and$92.5millionofoperatinglossesincertainjurisdictionsmaybecarriedforwardindefinitely.Additionally,asofFebruary28,2021,federalcapitallossestotaling$168.1millionarebeingcarriedforwardandwillexpireinfiscal2022.

Wehaverecognizedvaluationallowancesforoperatinglosscarryforwards,capitallosscarryforwards,andotherdeferredtaxassetswhenwebelieveitismorelikelythannotthattheseitemswillnotberealized.TheincreaseinourvaluationallowancesasofFebruary28,2021,primarilyrelatetoadjustmentsinexpectedutilizationofcapitallosscarryforwardsinconnectionwiththeWineandSpiritsDivestitureandthePaulMassonDivestiture.



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Theliabilityforincometaxesassociatedwithuncertaintaxpositions,excludinginterestandpenalties,andareconciliationofthebeginningandendingunrecognizedtaxbenefitliabilitiesisasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

BalanceasofMarch1 $ 249.4 $ 224.3 $ 89.3

Increasesasaresultoftaxpositionstakenduringapriorperiod 3.1 11.4 56.4

Decreasesasaresultoftaxpositionstakenduringapriorperiod (15.4) (14.8) (1.4)

Increasesasaresultoftaxpositionstakenduringthecurrentperiod 15.2 29.0 88.8

Decreasesrelatedtosettlementswithtaxauthorities (10.2) (0.1) (0.8)

Decreasesrelatedtolapseofapplicablestatuteoflimitations (6.0) (0.4) (8.0)

BalanceasoflastdayofFebruary $ 236.1 $ 249.4 $ 224.3

AsofFebruary28,2021,andFebruary29,2020,wehad$268.9millionand$276.2million,respectively,ofnon-currentunrecognizedtaxbenefitliabilities,includinginterestandpenalties,recognizedonourbalancesheets.Theseliabilitiesarerecordedasnon-currentaspaymentofcashisnotanticipatedwithinoneyearofthebalancesheetdate.

AsofFebruary28,2021,andFebruary29,2020,wehad$236.1millionand$249.4million,respectively,ofunrecognizedtaxbenefitliabilitiesthat,ifrecognized,woulddecreasetheeffectivetaxrateintheyearofresolution.

WefileU.S.federalincometaxreturnsandvariousstate,local,andforeignincometaxreturns.MajortaxjurisdictionswherewearesubjecttoexaminationbytaxauthoritiesincludeCanada,Mexico,Switzerland,andtheU.S.VariousU.S.federal,stateandforeignincometaxexaminationsarecurrentlyinprogress.Itisreasonablypossiblethattheliabilityassociatedwithourunrecognizedtaxbenefitliabilitieswillincreaseordecreasewithinthenexttwelvemonthsasaresultoftheseexaminationsortheexpirationofstatutesoflimitation.AsofFebruary28,2021,weestimatethatunrecognizedtaxbenefitliabilitiescouldchangebyarangeof$1millionto$8million.Withfewexceptions,wearenolongersubjecttoU.S.federal,state,local,orforeignincometaxexaminationsforfiscalyearspriortoFebruary28,2014.

Weprovideforadditionaltaxexpensebasedonprobableoutcomesofongoingtaxexaminationsandassessmentsinvariousjurisdictions.Whileitisoftendifficulttopredicttheoutcomeorthetimingofresolutionofanytaxmatter,webelievethereservesreflecttheprobableoutcomeofknowntaxcontingencies.Unfavorablesettlementofanyparticularissuewouldrequiretheuseofcash.

14. DEFERREDINCOMETAXESANDOTHERLIABILITIES

Themajorcomponentsofdeferredincometaxesandotherliabilitiesareasfollows:February28,

2021February29,

2020

(inmillions)

Deferredincometaxes $ 569.7 $ 384.0

Operatingleaseliability 471.1 483.6

Unrecognizedtaxbenefitliabilities 268.9 276.2

Long-termincometaxpayable 86.1 96.2

Other 97.7 86.3

$ 1,493.5 $ 1,326.3



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15. LEASES

GeneralWeprimarilyleasecertainvineyards,officeandproductionfacilities,warehouses,productionequipment,

andvehicles.Wehaveconcludedthatcertaingrapepurchasingarrangementsassociatedwiththepurchaseofgrapeproductionyieldedfromaspecifiedblockofavineyardandcertainthird-partylogisticsarrangementscontainalease.

BalancesheetlocationAsummaryofleaseright-of-useassetsandliabilitiesareasfollows:

Assets

Operatinglease Otherassets $ 477.9 $ 481.4

Financelease Property,plant,andequipment 17.0 26.6

Totalright-of-useassets $ 494.9 $ 508.0

Liabilities

Current:

Operatinglease Otheraccruedexpensesandliabilities $ 68.8 $ 76.6

Financelease Currentmaturitiesoflong-termdebt 4.6 11.7

Non-current:

Operatinglease Deferredincometaxesandotherliabilities 471.1 483.6

Financelease Long-termdebt,lesscurrentmaturities 10.9 13.6

Totalleaseliabilities $ 555.4 $ 585.5

BalanceSheetClassificationFebruary28,

2021February29,

2020

(inmillions)

LeasecostThecomponentsoftotalleasecostareasfollows:

FortheYearsEnded

February28,2021

February29,2020

(inmillions)

Operatingleasecost $ 93.4 $ 98.9

Financeleasecost:

Amortizationofright-of-useassets 11.0 12.2

Interestonleaseliabilities 0.5 0.7

Short-termleasecost 9.2 8.6

Variableleasecost(1) 216.5 403.3

Totalleasecost $ 330.6 $ 523.7

(1) ThedecreasefortheyearendedFebruary28,2021,wasprimarilydueto(i)transfersofgrapepurchasingagreementslargelyinconnectionwithourWineandSpiritsDivestituresand(ii)reducedgrapesupplyavailabilityduetothe2020U.S.wildfires(seeNote16).



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Leasematurities(1)

AsofFebruary28,2021,minimumpaymentsdueforleaseliabilitiesforeachofthefivesucceedingfiscalyearsandthereafterareasfollows:

OperatingLeases

FinanceLeases

(inmillions)

2022 $ 84.6 $ 4.8

2023 73.3 4.7

2024 66.7 4.2

2025 54.6 2.1

2026 44.1 —

Thereafter 336.0 —

Totalleasepayments 659.3 15.8

Less:Interest (119.4) (0.3)

Totalleaseliabilities $ 539.9 $ 15.5

(1) Forleaseswithtermsinexcessof12monthsatinception.

Supplementalinformation

FortheYearsEnded

February28,2021

February29,2020

(inmillions)

Cashpaidforamountsincludedinthemeasurementofleaseliabilities:

Operatingcashflowsfromoperatingleases $ 93.9 $ 100.7

Operatingcashflowsfromfinanceleases $ 0.5 $ 0.7

Financingcashflowsfromfinanceleases $ 10.5 $ 13.8

Right-of-useassetsobtainedinexchangefornewleaseliabilities:

Operatingleases $ 66.3 $ 34.3

Financeleases $ 11.6 $ 10.7

February28,2021

February29,2020

Weighted-averageremainingleaseterm:(1)

Operatingleases 12.8years 11.7years

Financeleases 2.9years 3.2years

Weighted-averagediscountrate:

Operatingleases 3.2% 3.5%

Financeleases 1.2% 2.6%

(1) Ourleaseshavevaryingtermswithremainingleasetermsofuptoapproximately30years.Certainofourleasearrangementsprovideuswiththeoptiontoextendortoterminatetheleaseearly.



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16. COMMITMENTSANDCONTINGENCIES

PurchasecommitmentsandcontingenciesWehaveenteredintovariouslong-termcontractsinthenormalcourseofbusinessforthepurchaseof

(i)certaininventorycomponents,(ii)transportation,marketing,andwarehousingservices,(iii)ITcontracts,(iv)certainenergyrequirements,and(v)property,plant,andequipmentandrelatedcontractorandmanufacturingservices.AsofFebruary28,2021,theestimatedaggregateminimumpurchasecommitmentsunderthesecontractsareasfollows:

Type LengthofCommitment Amount

(inmillions)

Rawmaterialsandsupplies(1) Packaging,grapes,malts,corn,andhops throughDecember2037 $ 4,063.8

Contractservices Transportation,marketing,andwarehousingservices,andITandenergycontracts throughDecember2030 816.5

Capitalexpenditures(2) Property,plant,andequipmentandcontractorandmanufacturingservices throughJanuary2024 243.7

In-processinventories Bulkwineandspirits throughApril2025 75.3

Other Finishedwinecasegoods throughMay2029 26.4

$ 5,225.7

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

(2) ConsistsofpurchasecommitmentsenteredintoprimarilyinconnectionwiththeexpansionprojectfortheObregonBrewery.

Additionally,wehaveenteredintovariouscontractualarrangementswithaffiliatesofOwens-Illinoisprimarilyforthepurchaseofglassbottlesusedlargelyinourimportedandcraftbeerportfolios.AmountspurchasedunderthesearrangementsfortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019,were$154.7million,$166.6million,and$238.8million,respectively.

IndemnificationliabilitiesInconnectionwithpriordivestitures,wehaveindemnifiedrespectivepartiesagainstcertainliabilitiesthat

mayarisesubsequenttothedivestiture.AsofFebruary28,2021,andFebruary29,2020,theseliabilitiesconsistprimarilyofindemnificationsrelatedtocertainleasecontractsandincometaxmatters.DuringtheyearendedFebruary28,2019,inconnectionwiththesaleoftheAccoladeWineInvestment,wewerereleasedfromcertainguaranteesandwerecognizedagainof$3.7millionaspartofthenetgainonthesaleofthisbusiness.Thisnetgainisincludedinincome(loss)fromunconsolidatedinvestmentswithinourconsolidatedresultsofoperations.AsofFebruary28,2021,andFebruary29,2020,thecarryingamountofourindemnificationliabilitieswas$17.0millionand$9.1million,respectively,andisincludedindeferredincometaxesandotherliabilities.Wedonotexpecttoberequiredtomakematerialpaymentsundertheindemnificationsandwebelievethatthelikelihoodisremotethattheindemnificationscouldhaveamaterialadverseeffectonourbusiness,liquidity,financialcondition,and/orresultsofoperations.

LegalmattersIntheordinarycourseofourbusiness,wearesubjecttolawsuits,arbitration,claims,andotherlegal

proceedingsinconnectionwithourbusiness.Someofthelegalactionsincludeclaimsforsubstantialorunspecifiedcompensatoryand/orpunitivedamagesand/orinjunctiverelief.Asubstantialadversejudgmentorotherunfavorableresolutionofthesematterscouldhaveamaterialadverseeffectonourfinancialcondition,resultsofoperations,orcashflows.Managementbelievesthatwehaveadequatelegaldefenseswithrespectto



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thelegalproceedingstowhichitisadefendantorrespondentandthattheoutcomeofthesependingproceedingsisnotlikelytohaveamaterialadverseeffectonourfinancialcondition,resultsofoperations,orcashflows.However,weareunabletopredicttheoutcomeofthesematters.

RegulatorymattersWeareindiscussionswithvariousgovernmentalagenciesconcerningmattersraisedduringregulatory

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

2020U.S.wildfiresInAugust2020,significantwildfiresbrokeoutinCalifornia,Oregon,andWashingtonstateswhichaffected

theU.S.grapeharvest.Noneofourfacilitiesweredamaged.Atthistime,wecontinuetoexpectnomaterialimpacttoourabilitytomeetcustomerdemand.Mostofourannualgraperequirementsaresatisfiedbysupplycontractsfromindependentgrowerswhich,inmanycases,allowforustorejectgrapesthatdonotmeetrequiredqualityspecifications,includingfromsmokedamage.Wecontinuetoassesswhentouseourrightsunderlawandoursupplycontractstorejectgrapesthataredamagedfromwildfires.FortheyearendedFebruary28,2021,werecognizeda$78.6millionlossinconnectionwiththewrite-downofbulkwineinventoryandcertaingrapesasaresultofsmokedamagesustainedduringthe2020U.S.wildfires.Thislosswasincludedincostofproductsoldwithinourconsolidatedresultsofoperations.Wehaveinsurancecoveragethatpartiallycoverslossesforgrapesinourownvineyards.Inthefourthquarteroffiscal2021wedeterminedalossrecoveryfromourinsurancecarrierswasrealizableandrecognized$8.2millionincostofproductsoldwithinourconsolidatedresultsofoperations.Whilewearecontinuingtopursuereimbursement,therecanbenoassurancetherewillbeanyadditionalrecoveries.Wetestthegrapesacquiredunderoursupplycontractsforsmokedamageandotherissuespriortoacceptingthem.Additionally,fortheyearendedFebruary28,2021,werecognized$28.6millioninunfavorablefixedcostabsorptionfromdecreasedproductionlevelsatcertainfacilitiesasperiodcostsincostofproductsoldwithinourconsolidatedresultsofoperationsintheWineandSpiritssegmentratherthancapitalizedininventories.

17. STOCKHOLDERS’EQUITY

CommonstockWehavetwoclassesofcommonstockwithamaterialnumberofsharesoutstanding:ClassACommon

StockandClassBConvertibleCommonStock.ClassBConvertibleCommonStocksharesareconvertibleintosharesofClassACommonStockonaone-to-onebasisatanytimeattheoptionoftheholder.HoldersofClassBConvertibleCommonStockareentitledtotenvotespershare.HoldersofClassACommonStockareentitledtoonevotepershareandacashdividendpremium.IfwepayacashdividendonClassBConvertibleCommonStock,eachshareofClassACommonStockwillreceiveanamountatleasttenpercentgreaterthantheamountofthecashdividendpersharepaidonClassBConvertibleCommonStock.Inaddition,theBoardofDirectorsmaydeclareandpayadividendonClassACommonStockwithoutpayinganydividendonClassBConvertibleCommonStock.However,ourseniorcreditfacilitylimitsthecashdividendsthatwecanpayonourcommonstocktoafixedamountperquarterbutthefixedamountmaybeexceededsubjecttovariousconditionssetforthintheseniorcreditfacility.

Inaddition,wehaveaclassofcommonstockwithanimmaterialnumberofsharesoutstanding:Class1CommonStock.SharesofClass1CommonStockgenerallyhavenovotingrights.Class1CommonStocksharesareconvertibleintosharesofClassACommonStockonaone-to-onebasisatanytimeattheoptionoftheholder,providedthattheholderimmediatelysellstheClassACommonStockacquireduponconversion.BecausesharesofClass1CommonStockareconvertibleintosharesofClassACommonStock,foreachshareofClass1CommonStockissued,wemustreserveoneshareofClassACommonStockforissuanceupontheconversionoftheshareofClass1CommonStock.HoldersofClass1CommonStockdonothaveanypreferenceastodividends,butmayparticipateinanydividendifandwhendeclaredbytheBoardofDirectors.IfwepayacashdividendonClass1CommonStock,eachshareofClassACommonStockwillreceiveanamountatleasttenpercentgreaterthantheamountofcashdividendpersharepaidonClass1CommonStock.Inaddition,theBoardofDirectorsmaydeclare



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andpayadividendonClassACommonStockwithoutpayingadividendonClass1CommonStock.ThecashdividendsdeclaredandpaidonClassBConvertibleCommonStockandClass1CommonStockmustalwaysbethesame.

Thenumberofsharesofcommonstockissuedandtreasurystock,andassociatedshareactivity,areasfollows:

BalanceatFebruary28,2018 258,718,356 28,335,387 1,970 90,743,239 5,005,800

Retirementoftreasuryshares(1) (74,000,000) — — (74,000,000) —

Sharerepurchases — — — 2,352,145 —

Conversionofshares 12,968 (12,968) — — —

Exerciseofstockoptions 1,008,854 — 1,147,654 — —

Employeestockpurchases — — — (76,844) —

Grantofrestrictedstockawards — — — (3,914) —

Vestingofrestrictedstockunits(2) — — — (24,308) —

Vestingofperformanceshareunits(2) — — — (62,352) —

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

Sharerepurchases — — — 265,593 —

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

Exerciseofstockoptions(3) — — 870,957 (747,527) —




Cancellationofrestrictedshares — — — 444 —

BalanceatFebruary29,2020 186,090,745 28,300,206 1,692,227 18,256,826 5,005,800

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

Exerciseofstockoptions(3) — — 4,326 (1,020,853) —




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

CommonStock TreasuryStock

ClassA ClassB Class1 ClassA ClassB

(1) SharesofourClassATreasuryStockwereretiredtoauthorizedandunissuedsharesofourClassACommonStock.

(2) Netofthefollowingshareswithheldtosatisfytaxwithholdingrequirements:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

RestrictedStockUnits 37,933 49,900 15,409

PerformanceShareUnits 9,433 17,439 44,016

(3) IncludesuseofClassATreasuryStockassociatedwithstockoptionexercisesbeginningMarch1,2019.

StockrepurchasesInJanuary2018,ourBoardofDirectorsauthorizedtherepurchaseofupto$3.0billionofourClassA

CommonStockandClassBConvertibleCommonStock.InJanuary2021,ourBoardofDirectorsauthorizedtherepurchaseofupto$2.0billionofourClassACommonStockandClassBConvertibleCommonStock.Sharesmay



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berepurchasedthroughopenmarketorprivatelynegotiatedtransactions.Sharesrepurchasedundertheseauthorizationswillbecometreasuryshares.

Asummaryofsharerepurchaseactivityisasfollows:

ClassACommonSharesRepurchased

RepurchaseAuthorization




DateAmount

AuthorizedDollarValue

NumberofShares

DollarValue

NumberofShares

DollarValue

NumberofShares

(inmillions,exceptsharedata)

2018Authorization(1) Jan2018 $3,000.0 $ — — $ 50.0 265,593 $ 504.3 2,352,145

2021Authorization(2) Jan2021 $2,000.0 — — — — — —

$ — — $ 50.0 265,593 $ 504.3 2,352,145(1) AsofFebruary28,2021,$1,954.1millionremainsavailableforfuturesharerepurchaseunderthe2018

Authorization.TheBoardofDirectorsdidnotspecifyadateuponwhichthe2018Authorizationwouldexpire.(2) AsofFebruary28,2021,noshareshavebeenrepurchasedunderthe2021Authorization.TheBoardofDirectors

didnotspecifyadateuponwhichthe2021Authorizationwouldexpire.

CommonstockdividendsInApril2021,ourBoardofDirectorsdeclaredaquarterlycashdividendof$0.76pershareofClassA

CommonStock,$0.69pershareofClassBConvertibleCommonStock,and$0.69pershareofClass1CommonStockpayableinthefirstquarteroffiscal2022.

18. STOCK-BASEDEMPLOYEECOMPENSATION

Wehavetwostock-basedemployeecompensationplans(asfurtherdiscussedbelow).Totalcompensationcostrecognizedforourstock-basedawardsandincometaxbenefitsrelatedtheretoareasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

Totalcompensationcostrecognizedinourresultsofoperations $ 63.0 $ 60.4 $ 64.1

Incometaxbenefitrelatedtheretorecognizedinourresultsofoperations $ 9.2 $ 9.5 $ 11.6

Long-TermStockIncentivePlanUnderourLong-TermStockIncentivePlan,nonqualifiedstockoptions,restrictedstock,restrictedstock

units,performanceshareunits,andotherstock-basedawardsmaybegrantedtoouremployees,officers,anddirectors.TheaggregatenumberofsharesofourClassACommonStockandClass1CommonStockavailableforawardsunderourLong-TermStockIncentivePlanis108,000,000shares.

Theexerciseprice,vestingperiod,andtermofnonqualifiedstockoptionsgrantedareestablishedbythecommitteeadministeringtheplan(the“Committee”).TheexercisepriceofanynonqualifiedstockoptionmaynotbelessthanthefairmarketvalueofourClassACommonStockonthedateofgrant.Nonqualifiedstockoptionsgenerallyvestandbecomeexercisableoverafour-yearperiodfromthedateofgrantandexpireasestablishedbytheCommittee,butnotlaterthantenyearsafterthegrantdate.

Grantsofrestrictedstock,restrictedstockunits,performanceshareunits,andotherstock-basedawardsmaycontainsuchvestingperiods,terms,conditions,andotherrequirementsastheCommitteemayestablish.Restrictedstockandrestrictedstockunitawardsarebasedonserviceandgenerallyvestoveronetofouryearsfromthedateofgrant.Performanceshareunitawardsarebasedonserviceandthesatisfactionofcertainperformanceconditions,andvestoverarequiredemployeeserviceperiod,generallyfromonetothreeyearsfrom



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thedateofgrant,whichcloselymatchestheperformanceperiod.Theperformanceconditionsincludetheachievementofspecifiedfinancialoroperationalperformancemetrics,ormarketconditionswhichrequiretheachievementofspecifiedlevelsofshareholderreturnrelativetoothercompaniesasdefinedintheapplicableperformanceshareunitagreement.Theactualnumberofsharestobeawardeduponvestingofaperformanceshareunitawardwillrangebetween0%and200%ofthetargetaward,baseduponthemeasureofperformanceascertifiedbytheCommittee.

AsummaryofstockoptionactivityunderourLong-TermStockIncentivePlanisasfollows:

FortheYearsEnded


Numberof

Options

WeightedAverageExercisePrice

Numberof

Options


Numberof

Options


OutstandingasofMarch1 4,525,418 $ 108.87 5,691,219 $ 81.87 7,444,701 $ 56.33

Granted 973,286 $ 154.62 639,957 $ 206.76 540,640 $ 227.91

Exercised (1,025,179) $ 47.42 (1,618,484) $ 41.77 (2,156,508) $ 23.55

Forfeited (56,897) $ 185.59 (175,917) $ 201.44 (133,250) $ 187.84

Expired (16,821) $ 221.16 (11,357) $ 224.07 (4,364) $ 175.86

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

Exercisable 2,754,888 $ 104.94 3,330,164 $ 75.61 4,456,486 $ 53.18

AsofFebruary28,2021,theaggregateintrinsicvalueofouroptionsoutstandingandexercisablewas$367.5millionand$303.6million,respectively.Inaddition,theweightedaverageremainingcontractuallifeforouroptionsoutstandingandexercisablewas5.6yearsand3.8years,respectively.

Thefairvalueofstockoptionsvested,andtheintrinsicvalueofandtaxbenefitrealizedfromtheexerciseofstockoptions,areasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

Fairvalueofstockoptionsvested $ 21.1 $ 21.1 $ 22.8

Intrinsicvalueofstockoptionsexercised $ 142.1 $ 255.0 $ 348.5

Taxbenefitrealizedfromstockoptionsexercised $ 33.9 $ 60.4 $ 82.6

Theweightedaveragegrant-datefairvalueofstockoptionsgrantedandtheweightedaverageinputsusedtoestimatethefairvalueonthedateofgrantusingtheBlack-Scholesoption-pricingmodelareasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

Grant-datefairvalue $ 31.26 $ 44.90 $ 53.06

Expectedlife(1) 6.3years 6.0years 5.9years

Expectedvolatility(2) 26.6% 22.1% 22.3%

Risk-freeinterestrate(3) 0.5% 2.5% 2.9%

Expecteddividendyield(4) 1.9% 1.5% 1.3%

(1) Basedonhistoricalexperienceofemployees’exercisebehaviorforsimilartypeawards.(2) BasedprimarilyonhistoricalvolatilitylevelsofourClassACommonStock.



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(3) BasedontheimpliedyieldcurrentlyavailableonU.S.Treasuryzerocouponissueswitharemainingtermequaltotheexpectedlife.

(4) BasedonthecalculatedyieldonourClassACommonStockatdateofgrantusingthecurrentfiscalyearprojectedannualizeddividenddistributionrate.

AsummaryofrestrictedClassACommonStockactivityunderourLong-TermStockIncentivePlanisasfollows:

RestrictedStockAwards

OutstandingbalanceasofMarch1,Nonvested — $ — 3,914 $ 214.29 3,848 $ 197.18

Granted — $ — — $ — 3,914 $ 214.29

Vested — $ — (3,470) $ 214.34 (3,848) $ 197.18

Forfeited — $ — (444) $ 213.85 — $ —

OutstandingbalanceasoflastdayofFebruary,Nonvested — $ — — $ — 3,914 $ 214.29

RestrictedStockUnits

OutstandingbalanceasofMarch1,Nonvested 271,143 $ 196.58 314,252 $ 181.62 286,658 $ 157.29

Granted 178,550 $ 165.57 138,472 $ 203.32 108,545 $ 226.97

Vested (118,220) $ 185.75 (141,211) $ 168.68 (39,717) $ 129.57

Forfeited (20,115) $ 183.77 (40,370) $ 200.87 (41,234) $ 182.00

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

PerformanceShareUnits

OutstandingbalanceasofMarch1,Nonvested 221,749 $ 231.49 259,464 $ 213.27 227,720 $ 177.90

Granted 39,781 $ 202.53 60,031 $ 253.72 172,468 $ 222.92

Performanceachievement(1) (1,517) $ 250.30 (17,035) $ 168.00 (281) $ 155.72

Vested (26,768) $ 250.30 (46,454) $ 156.80 (106,368) $ 147.34

Forfeited (6,782) $ 238.06 (34,257) $ 239.48 (34,075) $ 215.63

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

FortheYearsEnded


Number

WeightedAverage

Grant-DateFairValue Number

WeightedAverage

Grant-DateFairValue Number

WeightedAverage

Grant-DateFairValue

(1) Reflectsthenetnumberofawardsachievedabove(below)targetlevelsbasedonactualperformancemeasuredattheendoftheperformanceperiod.



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ThefairvalueofsharesvestedforourrestrictedClassACommonStockawardsisasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

Restrictedstockawards $ — $ 0.7 $ 0.8

Restrictedstockunits $ 19.2 $ 29.9 $ 9.0

Performanceshareunits $ 4.3 $ 9.9 $ 24.4

Theweightedaveragegrant-datefairvalueofperformanceshareunitsgrantedwithamarketconditionandtheweightedaverageinputsusedtoestimatethefairvalueonthedateofgrantusingtheMonteCarloSimulationmodelareasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

Grant-datefairvalue $ 202.53 $ 319.56 $ 322.42

Grant-dateprice $ 153.02 $ 205.46 $ 228.26

Performanceperiod 2.9years 2.8years 2.9years

Expectedvolatility(1) 31.7% 23.1% 20.7%

Risk-freeinterestrate(2) 0.2% 2.3% 2.6%

Expecteddividendyield(3) 0.0% 0.0% 0.0%

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

totheperformanceperiod.(3) Noexpecteddividendyieldasunitsgrantedearndividendequivalents.

EmployeeStockPurchasePlanWehaveanEmployeeStockPurchasePlanunderwhich9,000,000sharesofClassACommonStockmay

beissued.Underthetermsoftheplan,eligibleemployeesmaypurchasesharesofourClassACommonStockthroughpayrolldeductions.Thepurchasepriceisthelowerof85%ofthefairmarketvalueofthestockonthefirstorlastdayofthepurchaseperiod.FortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019,employeespurchased67,801shares,69,324shares,and76,844shares,respectively,underthisplan.

OtherAsofFebruary28,2021,therewas$66.8millionoftotalunrecognizedcompensationcostrelatedto

nonvestedstock-basedcompensationarrangementsgrantedunderourstock-basedemployeecompensationplans.Thiscostisexpectedtoberecognizedinourresultsofoperationsoveraweighted-averageperiodof2.1years.Withrespecttotheissuanceofsharesunderanyofourstock-basedcompensationplans,wehavetheoptiontoissueauthorizedbutunissuedsharesortreasuryshares.



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19. NETINCOME(LOSS)PERCOMMONSHAREATTRIBUTABLETOCBI

Thecomputationofbasicanddilutednetincome(loss)percommonshareisasfollows:

(inmillions,exceptpersharedata)

Netincome(loss)attributabletoCBIallocated–basic $ 1,777.2 $ 220.8 $ (10.2) $ (1.6) $ 3,049.5 $ 386.4

ConversionofClassBcommonsharesintoClassAcommonshares 220.8 — — — 386.4 —

Effectofstock-basedawardsonallocatednetincome(loss) — (1.5) — — — (8.3)

Netincome(loss)attributabletoCBIallocated–diluted $ 1,998.0 $ 219.3 $ (10.2) $ (1.6) $ 3,435.9 $ 378.1

Weightedaveragecommonsharesoutstanding–basic 170.239 23.280 168.329 23.313 167.249 23.321

ConversionofClassBcommonsharesintoClassAcommonshares(1) 23.280 — — — 23.321 —

Stock-basedawards,primarilystockoptions(1) 1.789 — — — 4.962 —

Weightedaveragecommonsharesoutstanding–diluted 195.308 23.280 168.329 23.313 195.532 23.321

Netincome(loss)percommonshareattributabletoCBI–basic $ 10.44 $ 9.48 $ (0.07) $ (0.07) $ 18.24 $ 16.57

Netincome(loss)percommonshareattributabletoCBI–diluted $ 10.23 $ 9.42 $ (0.07) $ (0.07) $ 17.57 $ 16.21

FortheYearsEnded


CommonStock CommonStock CommonStock

ClassA ClassB ClassA ClassB ClassA ClassB

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

FortheYearEnded

February29,2020

(inmillions)

ClassBConvertibleCommonStock 23.313

Stock-basedawards,primarilystockoptions 3.239



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20. ACCUMULATEDOTHERCOMPREHENSIVEINCOME(LOSS)

Othercomprehensiveincome(loss)attributabletoCBIincludesthefollowingcomponents:

FortheYearEndedFebruary28,2019Othercomprehensiveincome(loss)attributabletoCBI:

Foreigncurrencytranslationadjustments:Netgain(loss) $ (194.2) $ — $ (194.2)Reclassificationadjustments — — —

Netgain(loss)recognizedinothercomprehensiveincome(loss) (194.2) — (194.2)Unrealizedgain(loss)oncashflowhedges:

Netderivativegain(loss) 8.3 5.0 13.3Reclassificationadjustments (3.6) 0.9 (2.7)

Netgain(loss)recognizedinothercomprehensiveincome(loss) 4.7 5.9 10.6Unrealizedgain(loss)onAFSdebtsecurities:

NetAFSdebtsecuritiesgain(loss) (0.4) 0.1 (0.3)Reclassificationadjustments 1.9 0.9 2.8

Netgain(loss)recognizedinothercomprehensiveincome(loss) 1.5 1.0 2.5Pension/postretirementadjustments:

Netactuarialgain(loss) 0.4 (0.1) 0.3Reclassificationadjustments 0.3 (0.1) 0.2

Netgain(loss)recognizedinothercomprehensiveincome(loss) 0.7 (0.2) 0.5ShareofOCIofequitymethodinvestments:

Netgain(loss) 38.7 (9.1) 29.6Reclassificationadjustments — — —

Netgain(loss)recognizedinothercomprehensiveincome(loss) 38.7 (9.1) 29.6Othercomprehensiveincome(loss)attributabletoCBI $ (148.6) $ (2.4) $ (151.0)


Foreigncurrencytranslationadjustments:Netgain(loss) $ 83.4 $ — $ 83.4Reclassificationadjustments (22.6) — (22.6)

Netgain(loss)recognizedinothercomprehensiveincome(loss) 60.8 — 60.8Unrealizedgain(loss)oncashflowhedges:

Netderivativegain(loss) 48.0 6.4 54.4Reclassificationadjustments (15.3) (1.7) (17.0)

Netgain(loss)recognizedinothercomprehensiveincome(loss) 32.7 4.7 37.4Pension/postretirementadjustments:

Netactuarialgain(loss) (3.1) 0.9 (2.2)Reclassificationadjustments 1.8 (0.1) 1.7

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

Netgain(loss) (13.3) 3.2 (10.1)Reclassificationadjustments — — —

Netgain(loss)recognizedinothercomprehensiveincome(loss) (13.3) 3.2 (10.1)Othercomprehensiveincome(loss)attributabletoCBI $ 78.9 $ 8.7 $ 87.6

BeforeTaxAmount

Tax(Expense)Benefit

NetofTaxAmount

(inmillions)



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Foreigncurrencytranslationadjustments:Netgain(loss) $ (51.9) $ — $ (51.9)Reclassificationadjustments 5.1 — 5.1

Netgain(loss)recognizedinothercomprehensiveincome(loss) (46.8) — (46.8)Unrealizedgain(loss)oncashflowhedges:

Netderivativegain(loss) (48.1) 3.2 (44.9)Reclassificationadjustments 28.8 (2.9) 25.9

Netgain(loss)recognizedinothercomprehensiveincome(loss) (19.3) 0.3 (19.0)Pension/postretirementadjustments:

Netactuarialgain(loss) (2.3) 0.7 (1.6)Reclassificationadjustments — — —

Netgain(loss)recognizedinothercomprehensiveincome(loss) (2.3) 0.7 (1.6)ShareofOCIofequitymethodinvestments:

Netgain(loss) (1.6) (0.2) (1.8)Reclassificationadjustments — — —

Netgain(loss)recognizedinothercomprehensiveincome(loss) (1.6) (0.2) (1.8)Othercomprehensiveincome(loss)attributabletoCBI $ (70.0) $ 0.8 $ (69.2)

BeforeTaxAmount

Tax(Expense)Benefit

NetofTaxAmount

(inmillions)

Accumulatedothercomprehensiveincome(loss),netofincometaxeffect,includesthefollowingcomponents:

ForeignCurrencyTranslationAdjustments

NetUnrealizedGain(Loss)onDerivativeInstruments

Pension/PostretirementAdjustments

ShareofOCIofEquityMethodInvestments

AccumulatedOther

ComprehensiveIncome(Loss)

(inmillions)Balance,February29,2020 $ (345.7) $ 62.5 $ (2.6) $ 19.5 $ (266.3)

Othercomprehensiveincome(loss):Othercomprehensiveincome(loss)beforereclassificationadjustments (51.9) (44.9) (1.6) (1.8) (100.2)

Amountsreclassifiedfromaccumulatedothercomprehensiveincome(loss) 5.1 25.9 — — 31.0

Othercomprehensiveincome(loss) (46.8) (19.0) (1.6) (1.8) (69.2)Balance,February28,2021 $ (392.5) $ 43.5 $ (4.2) $ 17.7 $ (335.5)

21. SIGNIFICANTCUSTOMERSANDCONCENTRATIONOFCREDITRISK

Netsalestoourfivelargestcustomersrepresented31.8%,32.5%,and32.7%ofournetsalesfortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019,respectively.Netsalestoourfivelargestcustomersareexpectedtocontinuetorepresentasignificantportionofourrevenues.Netsalestoanindividualcustomerwhichamountto10%ormoreofournetsales,andtheassociatedamountsreceivablefromthiscustomerasapercentageofouraccountsreceivable,areasfollows:

FortheYearsEndedFebruary28,

2021February29,

2020February28,

2019SouthernGlazer’sWineandSpirits

Netsales 10.5% 10.5% 12.9%Accountsreceivable 28.7% 27.2% 30.8%



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NetsalesfortheabovecustomerareprimarilyreportedwithintheWineandSpiritssegment.Ourarrangementswithcertainofourcustomersmay,generally,beterminatedbyeitherpartywithpriornotice.Themajorityofouraccountsreceivablebalanceisgeneratedfromsalestoindependentdistributorswithwhomwehaveapredeterminedcollectiondatearrangedthroughelectronicfundstransfer.Weperformongoingcreditevaluationsofourcustomers’financialposition,andmanagementisoftheopinionthatanyriskofsignificantlossisreducedduetothediversityofourcustomersandgeographicsalesarea.

SubsequenteventEffectiveApril1,2021,approximately70%ofourbrandedwineandspiritsportfoliovolumeintheU.S.is

expectedtobedistributedthroughanexpandedrelationshipwithasingledistributor,SouthernGlazer’sWine&Spirits.

22. BUSINESSSEGMENTINFORMATION

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

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

Inaddition,managementexcludesComparableAdjustmentsfromitsevaluationoftheresultsofeachoperatingsegmentastheseComparableAdjustmentsarenotreflectiveofcoreoperationsofthesegments.Segmentoperatingperformanceandsegmentmanagementcompensationareevaluatedbaseduponcoresegmentoperatingincome(loss).Assuch,theperformancemeasuresforincentivecompensationpurposesforsegmentmanagementdonotincludetheimpactoftheseComparableAdjustments.



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

Costofproductsold

Recoveryof(losson)inventorywrite-down $ (70.4) $ 8.6 $ (3.3)

Strategicbusinessdevelopmentcosts (29.8) (124.5) (6.0)

COVID-19incrementalcosts (7.6) — —

Flowthroughofinventorystep-up (0.4) (1.5) (4.9)

Accelerateddepreciation (0.1) (7.6) (8.9)

Settlementsofundesignatedcommodityderivativecontracts 31.6 11.7 (8.6)

Netgain(loss)onundesignatedcommodityderivativecontracts 25.1 (49.0) 1.8

Totalcostofproductsold (51.6) (162.3) (29.9)


Restructuringandotherstrategicbusinessdevelopmentcosts (23.9) (25.3) (17.1)

Netgain(loss)onforeigncurrencyderivativecontracts (8.0) (1.8) (32.6)

Transaction,integration,andotheracquisition-relatedcosts (7.6) (9.2) (10.2)

Impairmentofintangibleassets (6.0) (11.0) (108.0)

COVID-19incrementalcosts (4.8) — —

Deferredcompensation — — (16.3)

Othergains(losses)(1) 14.7 7.3 10.1

Totalselling,general,andadministrativeexpenses (35.6) (40.0) (174.1)

Impairmentofassetsheldforsale (24.0) (449.7) —

Gain(loss)onsaleofbusiness 14.2 74.1 —

ComparableAdjustments,Operatingincome(loss) $ (97.0) $ (577.9) $ (204.0)

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

(1) Primarilyincludesthefollowing:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

Decrease(increase)inestimatedfairvalueofacontingentliabilityassociatedwithpriorperiodacquisitions $ 9.7 $ (11.4) $ —

Saleofcertainnon-coreassets $ 8.8 $ (0.3) $ 8.5

IncreaseinourownershipinterestinNelson’sGreenBrier $ — $ 11.8 $ —

Recognitionofpreviouslydeferredgainuponreleaseofarelatedguarantee $ — $ 6.2 $ —

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



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Beer

Netsales $ 6,074.6 $ 5,615.9 $ 5,202.1

Segmentoperatingincome(loss) $ 2,494.3 $ 2,247.9 $ 2,042.9

Capitalexpenditures $ 693.9 $ 571.7 $ 720.0

Depreciationandamortization $ 194.7 $ 204.3 $ 203.5

WineandSpirits

Netsales:

Wine $ 2,208.4 $ 2,367.5 $ 2,532.5

Spirits 331.9 360.1 381.4

Netsales $ 2,540.3 $ 2,727.6 $ 2,913.9

Segmentoperatingincome(loss) $ 622.4 $ 708.4 $ 771.2

Income(loss)fromunconsolidatedinvestments $ 31.7 $ 36.4 $ 33.4

Equitymethodinvestments(1) $ 125.7 $ 87.7 $ 79.7



CorporateOperationsandOther

Segmentoperatingincome(loss) $ (228.6) $ (223.9) $ (197.9)

Income(loss)fromunconsolidatedinvestments $ (0.4) $ (3.2) $ (0.2)

Equitymethodinvestments $ 83.9 $ 94.5 $ 53.8



Canopy

Netsales $ 378.6 $ 290.2 $ 48.6

Segmentoperatingincome(loss) $ (1,496.0) $ (685.8) $ (82.7)



ConsolidationandEliminations

Netsales $ (378.6) $ (290.2) $ (48.6)

Operatingincome(loss) $ 1,496.0 $ 685.8 $ 82.7

Income(loss)fromunconsolidatedinvestments $ (146.2) $ (221.7) $ (16.5)

Equitymethodinvestments $ 2,578.8 $ 2,911.7 $ 3,332.1

Capitalexpenditures $ (172.6) $ (572.8) $ (449.8)

Depreciationandamortization $ (103.3) $ (81.4) $ (21.9)

ComparableAdjustments

Operatingincome(loss) $ (97.0) $ (577.9) $ (204.0)

Income(loss)fromunconsolidatedinvestments $ 265.2 $ (2,480.1) $ 2,084.9


FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)



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Consolidated

Netsales $ 8,614.9 $ 8,343.5 $ 8,116.0

Operatingincome(loss) $ 2,791.1 $ 2,154.5 $ 2,412.2

Income(loss)fromunconsolidatedinvestments(2) $ 150.3 $ (2,668.6) $ 2,101.6

Equitymethodinvestments(1) $ 2,788.4 $ 3,093.9 $ 3,465.6



FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

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

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

Unrealizednetgain(loss)onsecuritiesmeasuredatfairvalue $ 802.0 $ (2,126.4) $ 1,971.2

Equityinearnings(losses)fromCanopyandrelatedactivities(i) (679.0) (575.9) (2.6)

Equityinearnings(losses)fromotherequitymethodinvestees 27.3 33.3 33.2

Netgain(loss)onsaleofunconsolidatedinvestment — 0.4 99.8

$ 150.3 $ (2,668.6) $ 2,101.6

(i)TheyearendedFebruary29,2020,includestheJune2019ModificationLoss.

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

Geographicdataisasfollows:

FortheYearsEnded

February28,2021

February29,2020

February28,2019

(inmillions)

Netsales

U.S. $ 8,396.5 $ 8,116.2 $ 7,894.8

Non-U.S.(primarilyCanada) 218.4 227.3 221.2

$ 8,614.9 $ 8,343.5 $ 8,116.0

February28,2021

February29,2020

(inmillions)

Long-livedtangibleassets(1)

U.S. $ 1,005.3 $ 897.7

Non-U.S.(primarilyMexico) 4,816.3 4,435.3

$ 5,821.6 $ 5,333.0

(1) Long-livedtangibleassetsbalanceatFebruary29,2020,excludesamountsreclassifiedtoassetsheldforsale.



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23. SUBSEQUENTEVENT

MexicaliBreweryInApril2021,ourBoardofDirectorsauthorizedmanagementtosellorabandontheMexicaliBrewery.

Subsequently,managementdeterminedthatwewillbeunabletouseorrepurposecertainassetsattheMexicaliBrewery.Accordingly,inthefirstquarteroffiscal2022,weexpecttorecognizealong-livedassetimpairmentofapproximately$650millionto$680millionwhichwillbeincludedwithinourconsolidatedresultsofoperations.ThefairvaluewillbedeterminedbasedontheexpectedsalvagevalueoftheabandonedassetsasofApril2021.WearecontinuingtoworkwithgovernmentofficialsinMexicoto(i)determinenextstepsforoursuspendedMexicaliBreweryconstructionprojectand(ii)pursuevariousformsofrecoveryforcapitalizedcostsandadditionalexpensesincurredinestablishingthebrewery,however,therecanbenoassuranceofanyrecoveries.Inthemedium-term,undernormaloperatingconditions,wehaveamplecapacityattheNavaandObregonbreweriestomeetconsumerneedsbasedoncurrentgrowthforecastsandcurrentandplannedproductioncapabilities.ToalignwithouranticipatedfuturegrowthexpectationswearealsoworkingwiththeMexicangovernmenttoexploreoptionstoaddfurthercapacityatanotherlocationinSoutheasternMexicowherethereisamplewaterandaskilledworkforcetomeetourlong-termneeds.

24. SELECTEDQUARTERLYFINANCIALINFORMATION(UNAUDITED)

Asummaryofselectedquarterlyfinancialinformationisasfollows:

FortheThreeMonthsEnded

February28,2021

February29,2020

(inmillions,exceptpersharedata)

Netsales $ 1,953.0 $ 1,902.9

Grossprofit $ 993.7 $ 949.8

Netincome(loss)attributabletoCBI(1) $ 382.9 $ 398.4

Netincome(loss)percommonshareattributabletoCBI(1):

Basic–ClassACommonStock $ 2.00 $ 2.10

Basic–ClassBConvertibleCommonStock $ 1.81 $ 1.91

Diluted–ClassACommonStock $ 1.95 $ 2.04

Diluted–ClassBConvertibleCommonStock $ 1.80 $ 1.89

(1) Includesthefollowing:

FortheThreeMonthsEnded

February28,2021

February29,2020

(inmillions,netofincometaxeffect)

Unrealizednetgain(loss)onsecuritiesmeasuredatfairvalue $ 206.3 $ 56.9

Netgain(loss)onundesignatedcommodityderivativecontracts $ 19.2 $ (19.2)

Gain(loss)onsaleofbusiness $ 15.6 $ 5.2

Equityinearnings(losses)fromCanopy $ (189.5) $ (15.6)

(Losson)recoveryofwrite-downofcertaininventoryasaresultofsmokedamagesustainedduringwildfires $ (34.4) $ —

Netincometax(provision)benefitrecognizedforadjustmentstovaluationallowances $ (4.8) $ (25.0)

Impairmentofassetheldforsale $ — $ (33.2)



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Item9A.ControlsandProcedures

DisclosurecontrolsandproceduresOurChiefExecutiveOfficerandourChiefFinancialOfficerhaveconcluded,basedontheirevaluationasof

theendoftheperiodcoveredbythisreport,thattheCompany’s“disclosurecontrolsandprocedures”(asdefinedintheSecuritiesExchangeActof1934Rules13a-15(e)and15d-15(e))areeffectivetoensurethatinformationrequiredtobedisclosedinthereportsthatwefileorsubmitundertheSecuritiesExchangeActof1934(i)isrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintheSecuritiesandExchangeCommission’srulesandforms,and(ii)isaccumulatedandcommunicatedtoourmanagement,includingourChiefExecutiveOfficerandourChiefFinancialOfficer,asappropriatetoallowtimelydecisionsregardingrequireddisclosure.

InternalcontroloverfinancialreportingSeepage59ofthisForm10-KforManagement’sAnnualReportonInternalControloverFinancial

Reporting,whichisincorporatedhereinbyreference.

Seepage60ofthisForm10-KfortheattestationreportofKPMGLLP,ourindependentregisteredpublicaccountingfirm,whichisincorporatedhereinbyreference.

Althoughmostofourcorporateandnon-productionworkforceareworkingremotelyduetoCOVID-19,wehavenotexperiencedamaterialimpacttoourinternalcontroloverfinancialreporting.Wecontinuetomonitorthepandemicanditseffectsonthedesignandoperatingeffectivenessofourinternalcontrols.

WeareintheprocessofimplementinganewglobalERPsystemacrossourbusinessunitsusingaphasedapproach.OnMarch1,2021,businessunitsintheU.S.,NewZealand,andItalyimplementedthenewERP.ThiswillresultinchangesinourinternalcontrolsforthefiscalquarterendedMay31,2021.Wedonotexpectthesechangestohaveamaterialimpactonourinternalcontrolsoverfinancialreporting.

Inconnectionwithmanagement’squarterlyevaluationof“internalcontroloverfinancialreporting”(asdefinedintheSecuritiesExchangeActof1934Rules13a-15(f)and15d-15(f)),nootherchangeswereidentifiedinourinternalcontroloverfinancialreportingduringourfiscalquarterendedFebruary28,2021(ourfourthfiscalquarter)thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.

PARTII OTHERKEYINFORMATION


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Item10.Directors,ExecutiveOfficers,andCorporateGovernance

TheinformationrequiredbythisItem(exceptfortheinformationregardingexecutiveofficersrequiredbyItem401ofRegulationS-KwhichisincludedinPartIhereofinaccordancewithGeneralInstructionG(3))isincorporatedhereinbyreferencetotheProxyStatementtobeissuedinconnectionwiththeAnnualMeetingofStockholdersofourCompanywhichisexpectedtobeheldonJuly20,2021,underthosesectionsoftheProxyStatementtobetitled“DirectorNominees”and“TheBoardofDirectorsandCommitteesoftheBoard.”ThatProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.

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

Item11.ExecutiveCompensation

TheinformationrequiredbythisItemisincorporatedhereinbyreferencetotheProxyStatementtobeissuedinconnectionwiththeAnnualMeetingofStockholdersofourCompanywhichisexpectedtobeheldonJuly20,2021,underthosesectionsoftheProxyStatementtobetitled“ExecutiveCompensation,”“CompensationCommitteeInterlocksandInsiderParticipation,”and“DirectorCompensation.”ThatProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.Notwithstandingtheforegoing,theCompensationCommitteeReportincludedwithinthesectionoftheProxyStatementtobetitled“ExecutiveCompensation”isonlybeing“furnished”hereunderandshallnotbedeemed“filed”withtheSecuritiesandExchangeCommissionorsubjecttotheliabilitiesofSection18oftheSecuritiesExchangeActof1934.

Item12.SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters

TheinformationrequiredbythisItemisincorporatedhereinbyreferencetotheProxyStatementtobeissuedinconnectionwiththeAnnualMeetingofStockholdersofourCompanywhichisexpectedtobeheldonJuly20,2021,underthatsectionoftheProxyStatementtobetitled“BeneficialOwnership.”ThatProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.

SecuritiesauthorizedforissuanceunderequitycompensationplansThefollowingtablesetsforthinformationwithrespecttoourcompensationplansunderwhichourequity

securitiesmaybeissued,asofFebruary28,2021.TheequitycompensationplansapprovedbysecurityholdersincludeourLong-TermStockIncentivePlanandour1989EmployeeStockPurchasePlan.

PARTIII OTHERKEYINFORMATION


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EquityCompensationPlanInformation

PlanCategory

Numberofsecuritiestobeissueduponexerciseofoutstanding

options,warrants,andrights

Weightedaverageexercisepriceofoutstanding

options,warrants,andrights

Numberofsecurities

remainingavailableforfutureissuance

underequitycompensationplans

(excludingsecuritiesreflectedinfirstcolumn)

Equitycompensationplansapprovedbysecurityholders 5,100,654 (1) $ 131.89 (2) 11,586,519 (3)

Equitycompensationplansnotapprovedbysecurityholders — $ — —

Total 5,100,654 $ 131.89 11,586,519

(1) Includes389,489sharesofunvestedperformanceshareunitsand311,358sharesofunvestedrestrictedstockunitsunderourLong-TermStockIncentivePlan.Theunvestedperformanceshareunitsrepresentthemaximumnumberofsharestobeawarded,whichrangesfrom100%to200%ofthetargetsharesgranted.Wecurrentlyestimatethat184,542ofthetargetsharesgrantedwillbeawardedbetween100%and150%oftarget;21,585ofthetargetsharesgrantedwillbeawardedbetween25%and50%,and20,336ofthetargetsharesgrantedwillnotbeawardedbaseduponourexpectationsasofFebruary28,2021,regardingtheachievementofspecifiedperformancetargets.

(2) ExcludesunvestedperformanceshareunitsandunvestedrestrictedstockunitsunderourLong-TermStockIncentivePlanthatcanbeexercisedfornoconsideration.

(3) Includes1,285,888sharesofClassACommonStockunderourEmployeeStockPurchasePlanremainingavailableforpurchase,ofwhichapproximately31,200sharesaresubjecttopurchaseduringthecurrentofferingperiod.

Item13.CertainRelationshipsandRelatedTransactions,andDirectorIndependence

TheinformationrequiredbythisItemisincorporatedhereinbyreferencetotheProxyStatementtobeissuedinconnectionwiththeAnnualMeetingofStockholdersofourCompanywhichisexpectedtobeheldonJuly20,2021,underthosesectionsoftheProxyStatementtobetitled“DirectorNominees,”“TheBoardofDirectorsandCommitteesoftheBoard,”and“CertainRelationshipsandRelatedTransactions.”ThatProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.

Item14.PrincipalAccountingFeesandServices

TheinformationrequiredbythisItemisincorporatedhereinbyreferencetotheProxyStatementtobeissuedinconnectionwiththeAnnualMeetingofStockholdersofourCompanywhichisexpectedtobeheldonJuly20,2021,underthatsectionoftheProxyStatementtobetitled“Proposal2–RatificationoftheSelectionofKPMGLLPasIndependentRegisteredPublicAccountingFirm.”ThatProxyStatementwillbefiledwithin120daysaftertheendofourfiscalyear.

PARTIII OTHERKEYINFORMATION


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Item15.Exhibits,FinancialStatementSchedules

1. FinancialStatements

ThefollowingconsolidatedfinancialstatementsoftheCompanyaresubmittedherewith:

Management’sAnnualReportonInternalControlOverFinancialReporting

ReportofIndependentRegisteredPublicAccountingFirm–KPMGLLP

ReportofIndependentRegisteredPublicAccountingFirm–KPMGLLP

ConsolidatedBalanceSheets–February28,2021,andFebruary29,2020

ConsolidatedStatementsofComprehensiveIncome(Loss)fortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019

ConsolidatedStatementsofChangesinStockholders’EquityfortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019

ConsolidatedStatementsofCashFlowsfortheyearsendedFebruary28,2021,February29,2020,andFebruary28,2019

NotestoConsolidatedFinancialStatements

2. FinancialStatementSchedules

SchedulesarenotsubmittedbecausetheyarenotapplicableornotrequiredunderRegulationS-Xorbecausetherequiredinformationisincludedinthefinancialstatementsornotesthereto.

3. ExhibitsrequiredtobefiledbyItem601ofRegulationsS-K

TheinformationcalledforbythisItemisincorporatedbyreferencefromtheIndextoExhibitsincludedinthisForm10-K.

Item16.Form10-KSummary

None.

PARTIV OTHERKEYINFORMATION


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INDEXTOEXHIBITSExhibitNo.

2.1 SubscriptionAgreement,datedasofAugust14,2018,byandbetweenCBGHoldingsLLCandCanopyGrowthCorporation,including,amongotherthings,aformoftheAmendedandRestatedInvestorRightsAgreement(filedasExhibit2.1totheCompany’sCurrentReportonForm8-KdatedAugust14,2018,filedAugust16,2018andincorporatedhereinbyreference).†

2.2 ForeignExchangeRateAgreementdatedOctober26,2018,betweenCBGHoldingsLLCandCanopyGrowthCorporation(filedasExhibit2.2totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedNovember30,2018andincorporatedhereinbyreference).

2.3 AssetPurchaseAgreementmadeandenteredintobyandbetweentheCompanyandE.&J.GalloWinery(nolongeroutstanding)(filedasExhibit2.1totheCompany’sCurrentReportonForm8-KdatedApril3,2019,filedApril8,2019andincorporatedhereinbyreference).†

2.4 BindingLetterAgreementdatedDecember11,2019andeffectiveDecember11,2019betweenConstellationBrands,Inc.andE.&J.GalloWineryregardingtheModifiedTransaction(includingtheFormofAmendedAgreement)(nolongeroutstanding)(filedasExhibit2.1totheCompany’sCurrentReportonForm8-KdatedDecember11,2019,filedDecember17,2019andincorporatedhereinbyreference).†‡

2.5 SecondAmendedandRestatedAssetPurchaseAgreementmadeandenteredintoasofMay22,2020,byandbetweenConstellationBrands,Inc.andE.&J.GalloWinery(filedasExhibit2.1totheCompany’sCurrentReportonForm8-KdatedMay22,2020,filedMay29,2020andincorporatedhereinbyreference).†‡

2.6 FirstAmendmentdatedSeptember28,2020andeffectiveSeptember28,2020,toSecondAmendedandRestatedAssetPurchaseAgreementmadeandenteredintoasofMay22,2020,byandbetweenConstellationBrands,Inc.andE.&J.GalloWinery(filedasExhibit2.6totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2020andincorporatedhereinbyreference).

2.7 NobiloBindingLetterAgreementdatedDecember11,2019andeffectiveDecember11,2019betweenConstellationBrands,Inc.andE.&J.GalloWineryregardingtheNobiloTransaction(includingtheFormofNobiloAssetPurchaseAgreement)(nolongeroutstanding)(filedasExhibit2.2totheCompany’sCurrentReportonForm8-KdatedDecember11,2019,filedDecember17,2019andincorporatedhereinbyreference).†

2.8 AmendmentdatedMay22,2020andeffectiveMay22,2020,toNobiloBindingLetterAgreementdatedDecember11,2019andeffectiveDecember11,2019betweenConstellationBrands,Inc.andE.&J.GalloWineryregardingtheNobiloTransaction(nolongeroutstanding)(filedasExhibit2.7totheCompany'sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,2020andincorporatedhereinbyreference).

2.9 AssetPurchaseAgreementmadeandenteredintoasofJune22,2020,byandbetweenConstellationBrands,Inc.andE.&J.GalloWineryregardingtheNobiloTransaction(filedasExhibit2.1totheCompany’sCurrentForm8-KdatedJune22,2020,filedJune25,2020andincorporatedhereinbyreference).†

3.1 RestatedCertificateofIncorporationoftheCompany(filedasExhibit3.1totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2009andincorporatedhereinbyreference).#

3.2 CertificateofAmendmenttotheCertificateofIncorporationoftheCompany(filedasExhibit3.2totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2009andincorporatedhereinbyreference).#

3.3 By-LawsoftheCompany,amendedandrestatedasofOctober3,2018(filedasExhibit3.3totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2018andincorporatedhereinbyreference).

4.1 Indenture,datedasofApril17,2012,byandamongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedApril17,2012,filedApril23,2012andincorporatedhereinbyreference).#

4.2 SupplementalIndentureNo.1,withrespectto6.0%SeniorNotesdueMay2022,datedasofApril17,2012,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(nolongeroutstanding)(filedasExhibit4.1.1totheCompany’sCurrentReportonForm8-KdatedApril17,2012,filedApril23,2012andincorporatedhereinbyreference).#

4.3 SupplementalIndentureNo.3,withrespectto3.75%SeniorNotesdueMay2021,datedasofMay14,2013,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(nolongeroutstanding)(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedMay14,2013,filedMay16,2013andincorporatedhereinbyreference).#

4.4 SupplementalIndentureNo.4,withrespectto4.25%SeniorNotesdueMay2023,datedasofMay14,2013,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.2totheCompany’sCurrentReportonForm8-KdatedMay14,2013,filedMay16,2013andincorporatedhereinbyreference).#



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4.5 SupplementalIndentureNo.5,datedasofJune7,2013,amongtheCompany,ConstellationBrandsBeachHoldings,Inc.,CrownImportsLLC,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.4totheCompany’sCurrentReportonForm8-KdatedJune7,2013,filedJune11,2013andincorporatedhereinbyreference).#

4.6 SupplementalIndentureNo.6datedasofMay28,2014,amongtheCompany,ConstellationMarketingServices,Inc.,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.21totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,2014andincorporatedhereinbyreference).#

4.7 SupplementalIndentureNo.7,withrespectto3.875%SeniorNotesdue2019,datedasofNovember3,2014,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(nolongeroutstanding)(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedNovember3,2014,filedNovember7,2014andincorporatedhereinbyreference).#

4.8 SupplementalIndentureNo.8,withrespectto4.750%SeniorNotesdue2024,datedasofNovember3,2014,amongtheCompanyasIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.2totheCompany’sCurrentReportonform8-KdatedNovember3,2014,filedNovember7,2014andincorporatedhereinbyreference).#

4.9 SupplementalIndentureNo.9,withrespectto4.750%SeniorNotesdue2025,datedDecember4,2015,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.1totheCompany’sCurrentreportonForm8-K,datedDecember4,2015,filedDecember8,2015andincorporatedhereinbyreference).#

4.10 SupplementalIndentureNo.10,datedasofJanuary15,2016,amongtheCompany,HomeBrewMart,Inc.,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.26totheCompany’sAnnualReportonForm10-KforthefiscalyearendedFebruary29,2016andincorporatedbyreference).#

4.11 SupplementalIndentureNo.11withrespectto3.700%SeniorNotesdue2026,datedasofDecember6,2016,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee,(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedDecember6,2016,filedDecember6,2016andincorporatedhereinbyreference).#

4.12 SupplementalIndentureNo.12withrespectto2.700%SeniorNotesdue2022,datedasofMay9,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedMay9,2017,filedMay9,2017andincorporatedhereinbyreference).



4.15 SupplementalIndentureNo.15withrespectto2.000%SeniorNotesdue2019,datedasofNovember7,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(nolongeroutstanding)(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedNovember7,2017,filedNovember7,2017andincorporatedhereinbyreference).

4.16 SupplementalIndentureNo.16withrespectto2.250%SeniorNotesdue2020datedasofNovember7,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(nolongeroutstanding)(filedasExhibit4.2totheCompany’sCurrentReportonForm8-KdatedNovember7,2017,filedNovember7,2017andincorporatedhereinbyreference).

4.17 SupplementalIndentureNo.17withrespectto2.650%SeniorNotesdue2022,datedasofNovember7,2017,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.3totheCompany’sCurrentReportonForm8-KdatedNovember7,2017,filedNovember7,2017andincorporatedhereinbyreference).

4.18 SupplementalIndentureNo.18withrespectto3.200%SeniorNotesdue2023,datedasofFebruary7,2018,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedFebruary7,2018,filedFebruary7,2018andincorporatedhereinbyreference).



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4.21 SupplementalIndentureNo.21withrespecttoSeniorFloatingRateNotesdue2021,datedasofOctober29,2018,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(nolongeroutstanding)(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedOctober29,2018,filedOctober29,2018andincorporatedhereinbyreference).

4.22 SupplementalIndentureNo.22withrespectto4.400%SeniorNotesdue2025,datedasofOctober29,2018,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.2totheCompany’sCurrentReportonForm8-KdatedOctober29,2018,filedOctober29,2018andincorporatedhereinbyreference).



4.25 SupplementalIndentureNo.25withrespectto3.150%SeniorNotesdue2029,datedasofJuly29,2019,amongtheCompany,asIssuer,certainsubsidiaries,asGuarantors,andManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedJuly29,2019,filedJuly29,2019andincorporatedhereinbyreference).

4.26 SupplementalIndentureNo.26withrespectto2.875%SeniorNotesdue2030,datedasofApril27,2020,amongtheCompany,asIssuerandManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedApril27,2020,filedApril27,2020andincorporatedhereinbyreference).

4.27 SupplementalIndentureNo.27withrespectto3.750%SeniorNotesdue2050,datedasofApril27,2020,amongtheCompany,asIssuerandManufacturersandTradersTrustCompany,asTrustee(filedasExhibit4.2totheCompany’sCurrentReportonForm8-KdatedApril27,2020,filedApril27,2020andincorporatedhereinbyreference).

4.28 RestatementAgreement,datedasofMarch26,2020byandamongtheCompany,CBInternationalFinanceS.àr.l.,certainoftheCompany’ssubsidiariesasguarantors,BankofAmerica,N.A.,asAdministrativeAgent,andtheLenderspartythereto,includingtheNinthAmendedandRestatedCreditAgreementdatedasofMarch26,2020,byandamongtheCompany,CBInternationalFinancingS.àr.l.,BankofAmerica,N.A.,asAdministrativeAgent,andtheLenderspartythereto(filedasExhibit4.1totheCompany’sCurrentReportonForm8-KdatedMarch26,2020,filedMarch31,2020andincorporatedhereinbyreference).†

4.29 TermLoanRestatementAgreement,datedasofMarch26,2020,byandamongtheCompany,certainoftheCompany’ssubsidiariesasguarantors,BankofAmerica,N.A.,asadministrativeagent,andtheLenderspartythereto,includingtheAmendedandRestatedTermLoanCreditAgreement,datedMarch26,2020,byandamongtheCompany,BankofAmerica,N.A.,asadministrativeagentandtheLenderspartythereto(nolongeroutstanding)(filedasExhibit4.2totheCompany’sCurrentReportonForm8-KdatedMarch26,2020,filedMarch31,2020andincorporatedhereinbyreference).†

4.30 2020TermLoanRestatementAgreement,datedasofMarch26,2020,byandamongtheCompany,certainoftheCompany’ssubsidiariesasguarantors,BankofAmerica,N.A.,asadministrativeagentandlender,includingtheAmendedandRestatedTermLoanCreditAgreement,datedMarch26,2020,byandbetweentheCompany,BankofAmerica,N.A.,asadministrativeagentandlender(filedasExhibit4.3totheCompanyCurrentReportonForm8-KdatedMarch26,2020filedMarch31,2020andincorporatedhereinbyreference).†

4.31 DescriptionoftheRegistrant’sSecuritiesRegisteredPursuanttoSection12oftheSecuritiesExchangeActof1934(filedherewith).

10.1 ConstellationBrands,Inc.Long-TermStockIncentivePlan,amendedandrestatedasofJuly18,2017(filedasExhibit10.4totheCompany’sCurrentReportonForm8-KdatedJuly18,2017,filedJuly20,2017andincorporatedhereinbyreference).*



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10.2 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterApril5,2010andbeforeApril3,2012)(filedasExhibit99.1totheCompany’sCurrentReportonForm8-K,datedApril5,2010,filedApril9,2010andincorporatedhereinbyreference).*#

10.3 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterApril3,2012andbeforeApril28,2014)(filedasExhibit99.1totheCompany’sCurrentReportonForm8-KdatedApril3,2012,filedApril5,2012andincorporatedhereinbyreference).*#

10.4 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterApril28,2014andbeforeApril25,2016)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedApril28,2014,filedMay1,2014andincorporatedhereinbyreference).*#

10.5 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterApril25,2016andbeforeApril21,2017)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedApril25,2016,filedApril28,2016andincorporatedhereinbyreference).*#

10.6 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterApril21,2017andbeforeApril23,2018)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedApril21,2017,filedApril25,2017andincorporatedhereinbyreference).*

10.7 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterApril23,2018andbeforeApril23,2019)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedApril23,2018,filedApril26,2018andincorporatedhereinbyreference).*

10.8 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlant(grantsonorafterApril23,2019andbeforeApril21,2020)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedApril23,2019,filedApril26,2019andincorporatedhereinbyreference).*

10.9 FormofTermsandConditionsMemorandumforEmployeeswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlant(grantsonandafterApril21,2020)(filedasExhibit10.5totheCompany'sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,2020andincorporatedhereinbyreference).*

10.10 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril25,2016andbeforeApril21,2017)(filedasExhibit10.2totheCompany’sCurrentReportonForm8-KdatedApril25,2016,filedApril28,2016andincorporatedhereinbyreference).*#

10.11 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril21,2017andbeforeApril23,2018)(filedasExhibit10.2totheCompany’sCurrentReportonForm8-KdatedApril21,2017,filedApril25,2017andincorporatedhereinbyreference).*

10.12 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril23,2018andbeforeApril23,2019)(filedasExhibit10.2totheCompany’sCurrentReportonForm8-KdatedApril23,2018,filedApril26,2018andincorporatedhereinbyreference).*

10.13 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril23,2019andbeforeApril21,2020(filedasExhibit10.2totheCompany’sCurrentReportonForm8-KdatedApril23,2019,filedApril26,2019andincorporatedhereinbyreference).*

10.14 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonandafterApril21,2020)(filedasExhibit10.6totheCompany'sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,2020andincorporatedhereinbyreference).*

10.15 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(relatingtocliffvestedawards)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedJuly24,2013,filedJuly26,2013andincorporatedhereinbyreference).*#

10.16 FormofRestrictedStockUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(providingforratablevestingoverthreeyears)(filedasExhibit10.20totheCompany’sAnnualReportonForm10-KforthefiscalyearendedFebruary28,2015andincorporatedhereinbyreference).*#

10.17 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril21,2017andbeforeApril23,2018)(filedasExhibit10.3totheCompany’sCurrentReportonForm8-KdatedApril21,2017,filedApril25,2017andincorporatedhereinbyreference).*



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10.18 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonorafterApril23,2018andbeforeApril23,2019)(filedasExhibit10.3totheCompany’sCurrentReportonForm8-KdatedApril23,2018,filedApril26,2018andincorporatedhereinbyreference).*

10.19 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlanawardsonorafterApril23,2019andbeforeApril21,2020)(filedasExhibit10.3totheCompany’sCurrentReportonForm8-KdatedApril23,2019,filedApril26,2019andincorporatedhereinbyreference).*

10.20 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(awardsonandafterApril21,2020)(filedasExhibit10.7totheCompany'sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,2020andincorporatedhereinbyreference).*†

10.21 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(relatingtospecifiedperformancecriteria)(filedasExhibit10.28totheCompany’sAnnualReportonForm10-KforthefiscalyearendedFebruary28,2015andincorporatedhereinbyreference).*#

10.22 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermStockIncentivePlan(relatingtocontingentgrants)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedOctober19,2018,filedOctober22,2018andincorporatedhereinbyreference).*

10.23 FormofPerformanceShareUnitAgreementwithrespecttotheCompany’sLong-TermIncentivePlan(relatingtomarginandmarketperformance)(filedasExhibit10.5totheCompany’sQuarterlyReportonForm10-QforfiscalquarterendedAugust31,2019andincorporatedhereinbyreference).*

10.24 FormofTermsandConditionsMemorandumforDirectorswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly17,2008andbeforeJuly22,2010)(filedasExhibit10.2totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2008andincorporatedhereinbyreference).*#

10.25 FormofTermsandConditionsMemorandumforDirectorswithrespecttoaproratagrantofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(filedasExhibit99.1totheCompany’sCurrentReportonForm8-KdatedApril20,2010,filedApril22,2010andincorporatedhereinbyreference).*#

10.26 FormofTermsandConditionsMemorandumforDirectorswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly22,2010andbeforeJuly27,2012)(filedasExhibit10.1totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2010andincorporatedhereinbyreference).*#

10.27 FormofTermsandConditionsMemorandumforDirectorswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly27,2012andbeforeJuly23,2014)(filedasExhibit10.3totheCompany’sCurrentReportonForm8-KdatedJuly27,2012,filedJuly31,2012andincorporatedhereinbyreference).*#

10.28 FormofTermsandConditionsMemorandumforDirectorswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly23,2014andbeforeJuly20,2016)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedJuly23,2014,filedJuly25,2014andincorporatedhereinbyreference).*#

10.29 FormofTermsandConditionsMemorandumforDirectorswithrespecttooptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly20,2016andbeforeJuly18,2017)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedJuly20,2016,filedJuly22,2016andincorporatedhereinbyreference).*

10.30 FormofTermsandConditionsMemorandumforDirectorswithrespecttooptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonorafterJuly18,2017andbeforeJuly16,2019)(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedJuly18,2017,filedJuly20,2017andincorporatedhereinbyreference).*

10.31 FormofStockOptionAgreementforDirectorswithrespecttograntsofoptionstopurchaseClass1StockpursuanttotheCompany’sLong-TermStockIncentivePlan(grantsonandafterJuly16,2019)(filedasExhibit10.6totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2019andincorporatedhereinbyreference).*

10.32 FormofRestrictedStockUnitAwardforDirectorswithrespecttoawardsofrestrictedstockunitspursuanttotheCompany’sLong-TermStockIncentivePlan(awardsonandafterJuly16,2019)(filedasExhibit10.7totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2019andincorporatedhereinbyreference).*

10.33 RulesforCashIncentiveAwardsundertheCompany’sLong-TermStockIncentivePlan(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedMarch27,2018,filedMarch29,2018andincorporatedhereinbyreference).*



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10.34 ConstellationBrands,Inc.AnnualManagementIncentivePlan,amendedandrestatedasofJuly27,2012(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedJuly27,2012,filedJuly31,2012andincorporatedhereinbyreference).*#

10.35 ConstellationBrands,Inc.Non-QualifiedSavingsPlan(filedasExhibit10.2totheCompany’sCurrentReportonForm8-KdatedOctober2,2018,filedOctober4,2018andincorporatedhereinbyreference).*

10.36 SupplementalExecutiveRetirementPlanoftheCompany(filedasExhibit10.14totheCompany’sAnnualReportonForm10-KforthefiscalyearendedFebruary28,1999andincorporatedhereinbyreference).*#

10.37 FirstAmendmenttotheCompany’sSupplementalExecutiveRetirementPlan(filedasExhibit10totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,1999andincorporatedhereinbyreference).*#

10.38 SecondAmendmenttotheCompany’sSupplementalExecutiveRetirementPlan(filedasExhibit10.20totheCompany’sAnnualReportonForm10-KforthefiscalyearendedFebruary28,2001andincorporatedhereinbyreference).*#

10.39 ThirdAmendmenttotheCompany’sSupplementalExecutiveRetirementPlan(filedasExhibit99.2totheCompany’sCurrentReportonForm8-KdatedApril7,2005,filedApril13,2005andincorporatedhereinbyreference).*#

10.40 2005SupplementalExecutiveRetirementPlanoftheCompany(filedasExhibit99.3totheCompany’sCurrentReportonForm8-KdatedApril7,2005,filedApril13,2005andincorporatedhereinbyreference).*#

10.41 FirstAmendmenttotheCompany’s2005SupplementalExecutiveRetirementPlan(filedasExhibit10.7totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,2007andincorporatedhereinbyreference).*#

10.42 SecondAmendmenttotheCompany’s2005SupplementalExecutiveRetirementPlan(filedasExhibit10.2totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedNovember30,2013andincorporatedhereinbyreference).*#

10.43 ThirdAmendmenttotheCompany’s2005SupplementalExecutiveRetirementPlan(filedasExhibit10.1totheCompany’sCurrentReportonForm8-KdatedOctober2,2018,filedOctober4,2018andincorporatedhereinbyreference).*

10.44 FormofExecutiveEmploymentAgreementbetweenConstellationBrands,Inc.anditsChairmanoftheBoardanditsViceChairmanoftheBoard(filedasExhibit99.1totheCompany’sCurrentReportonForm8-KdatedMay21,2008,filedMay21,2008andincorporatedhereinbyreference).*#

10.45 FormofExecutiveEmploymentAgreementbetweenConstellationBrands,Inc.andcertainOtherExecutiveOfficers(includingF.PaulHetterich)(filedasExhibit99.2totheCompany’sCurrentReportonForm8-KdatedMay21,2008,filedMay21,2008andincorporatedhereinbyreference).*#

10.46 ExecutiveEmploymentAgreementmadeasofJune17,2013,betweenConstellationBrands,Inc.andThomasM.Kane(filedasExhibit10.9totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedAugust31,2013andincorporatedhereinbyreference).*#

10.47 ExecutiveEmploymentAgreementmadeasofJanuary26,2015,betweenConstellationBrands,Inc.andWilliamA.Newlands(filedasExhibit10.57totheCompany’sAnnualReportonForm10-KforthefiscalyearendedFebruary28,2015andincorporatedhereinbyreference).*#

10.48 ExecutiveEmploymentAgreementmadeasofJune3,2019,betweenConstellationBrands,Inc.andRobertL.Hanson(filedasExhibit10.6totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,2019andincorporatedhereinbyreference).*

10.49 FormofExecutiveEmploymentAgreementbetweenConstellationBrands,Inc.andcertainofitsOtherExecutiveOfficers(includingJamesO.Bourdeau,GarthHankinson,MichaelMcGrew,MallikaMonteiro,andJamesA.Sabia,Jr.)(filedasExhibit10.3totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedMay31,2017andincorporatedhereinbyreference).*

10.50 DescriptionofCompensationArrangements,asofJanuary6,2021,forNon-ManagementDirectors(filedasExhibit10.1totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedNovember30,2020andincorporatedhereinbyreference).*

10.51 AmendedandRestatedSub-licenseAgreement,datedasofJune7,2013,betweenMarcasModelo,S.deR.L.deC.V.andConstellationBeersLtd.(filedasExhibit10.2totheCompany’sCurrentReportonForm8-KdatedJune7,2013,filedJune11,2013andincorporatedhereinbyreference).+#

21.1 SubsidiariesoftheCompany(filedherewith).

23.1 ConsentofKPMGLLP(filedherewith).

31.1 CertificationofChiefExecutiveOfficerpursuanttoRule13a-14(a)orRule15d-14(a)oftheSecuritiesExchangeActof1934,asamended(filedherewith).



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31.2 CertificationofChiefFinancialOfficerpursuanttoRule13a-14(a)orRule15d-14(a)oftheSecuritiesExchangeActof1934,asamended(filedherewith).

32.1 CertificationofChiefExecutiveOfficerpursuantto18U.S.C.Section1350(filedherewith).

32.2 CertificationofChiefFinancialOfficerpursuantto18U.S.C.Section1350(filedherewith).

99.1 ConstellationBrands,Inc.1989EmployeeStockPurchasePlan(amendedandrestatedasofJuly24,2013)(filedasExhibit99.1totheCompany’sCurrentReportonForm8-KdatedJuly24,2013,filedJuly26,2013andincorporatedhereinbyreference).*#

99.2 FirstAmendment,datedandeffectiveApril25,2016,totheCompany’s1989EmployeeStockPurchasePlan(filedasExhibit99.1totheCompany’sCurrentReportonForm8-KdatedApril25,2016,filedApril28,2016andincorporatedhereinbyreference).*#

99.3 FinalJudgmentfiledwiththeUnitedStatesDistrictCourtfortheDistrictofColumbiaonOctober24,2013,togetherwithExhibitsBandC(filedasExhibit99.1totheCompany’sQuarterlyReportonForm10-QforthefiscalquarterendedNovember30,2013andincorporatedhereinbyreference).#

99.4 ConsentAgreement,datedApril18,2019,byandbetweenCBGHoldingsLLCandCanopyGrowthCorporation(incorporatedhereinbyreferencetoExhibit99.4ofCanopyGrowthCorporation’sForm6-KfiledApril30,2019).

99.5 SecondAmendedandRestatedInvestorRightsAgreement,datedApril18,2019,byandamongGreenstarCanadaInvestmentLimitedPartnership,CBGHoldingsLLCandCanopyGrowthCorporation(incorporatedhereinbyreferencetoExhibit99.3ofCanopyGrowthCorporation’sForm6-KfiledApril30,2019).

101.INS XBRLInstanceDocument-theinstancedocumentdoesnotappearintheInteractiveDataFilebecauseitsXBRLtagsareembeddedwithintheInlineXBRLdocument(filedherewith).

101.SCH XBRLTaxonomyExtensionSchemaDocument(filedherewith).

101.CAL XBRLTaxonomyExtensionCalculationLinkbaseDocument(filedherewith).

101.DEF XBRLTaxonomyExtensionDefinitionLinkbaseDocument(filedherewith).

101.LAB XBRLTaxonomyExtensionLabelsLinkbaseDocument(filedherewith).

101.PRE XBRLTaxonomyExtensionPresentationLinkbaseDocument(filedherewith).

104 CoverPageInteractiveDataFile(formattedasInlineXBRLandcontainedinExhibit101).

* Designatesmanagementcontractorcompensatoryplanorarrangement.

# Company’sCommissionFileNo.001-08495.ForfilingspriortoOctober4,1999,useCommissionFileNo.000-07570.

† Theexhibits,disclosureschedules,andotherschedules,asapplicable,havebeenomittedpursuanttoItem601(a)(5)ofRegulationS-K.ConstellationBrands,Inc.agreestofurnishsupplementallyacopyofsuchexhibits,disclosureschedules,andotherschedules,asapplicable,oranysectionthereof,totheSECuponrequest.

‡ PortionsofthisexhibitareredactedpursuanttoItem601(b)(2)(ii)ofRegulationS-K.

+ PortionsofthisexhibitwereredactedpursuanttoaconfidentialtreatmentrequestfiledwithandapprovedbytheSecuritiesandExchangeCommissionpursuanttoRule24b-2undertheSecuritiesExchangeActof1934,asamended.

Weagree,uponrequestoftheSecuritiesandExchangeCommission,tofurnishcopiesofeachinstrumentthatdefinestherightsofholdersoflong-termdebtoftheCompanyoritssubsidiariesthatisnotfiledherewithpursuanttoItem601(b)(4)(iii)(A)becausethetotalamountoflong-termdebtauthorizedundersuchinstrumentdoesnotexceed10%ofthetotalassetsoftheCompanyanditssubsidiariesonaconsolidatedbasis.



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SIGNATURES

PursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.

CONSTELLATIONBRANDS,INC.

By: /s/WilliamA.Newlands

April20,2021WilliamA.NewlandsPresidentandChiefExecutiveOfficer

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbelowbythefollowingpersonsonbehalfoftheregistrantandinthecapacitiesandonthedatesindicated.

/s/WilliamA.Newlands /s/GarthHankinsonApril20,2021 April20,2021

WilliamA.Newlands,Director,PresidentandChiefExecutiveOfficer(principalexecutiveofficer)

GarthHankinson,ExecutiveVicePresidentandChiefFinancialOfficer(principalfinancialofficerandprincipalaccountingofficer)

/s/RobertSands /s/RichardSandsApril20,2021 April20,2021RobertSands,DirectorandExecutiveChairmanoftheBoard

RichardSands,DirectorandExecutiveViceChairmanoftheBoard

/s/ChristyClark /s/JenniferM.DanielsApril20,2021 April20,2021ChristyClark,Director JenniferM.Daniels,Director

/s/NicholasI.Fink /s/JerryFowden

April20,2021 April20,2021

NicholasFink,Director JerryFowden,Director


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/s/ErnestoM.Hernández /s/SusanSomersilleJohnsonApril20,2021 April20,2021ErnestoM.Hernández,Director SusanSomersilleJohnson,Director

/s/JamesA.LockeIII /s/JoseManuelMaderoGarzaApril20,2021 April20,2021JamesA.LockeIII,Director JoseManuelMaderoGarza,Director

/s/DanielJ.McCarthy /s/JudyA.SchmelingApril20,2021 April20,2021DanielJ.McCarthy,Director JudyA.Schmeling,Director


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*$100 invested on 2/29/16 in stock or index, including reinvestment of dividends.Fiscal year ending February 28.

Copyright © 2021Standard & Poor’s, a division of S&P Global. All rights reserved.

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

2/16 2/17 2/18 2/19 2/20 2/21

Constellation Brands, Inc. Class A 100.00 113.43 155.52 123.90 128.20 161.87 Constellation Brands, Inc. Class B 100.00 111.60 156.20 123.76 123.01 165.25 S&P 500 100.00 124.98 146.35 153.20 165.75 217.61 S&P 500 Food & Beverages Index 100.00 113.88 111.64 106.87 114.92 124.62

2 /16 2 /17 2 /18 2 /20 2 /212 /19

$200

$225

$175

$125

$75

$150

$100

$50


PERFORMANCE GRAPH

Set forth below is a line graph comparing, for the fi scal years ended the last day of February 2017, 2018, 2019, 2020, and 2021, the cumulative total stockholder return of the Company’s Class A Common Stock and Class B Common Stock with the cumulative total return of the S&P 500 Index and the S&P 500 Food & Beverages Index. The graph assumes the investment of $100.00 on February 28, 2016 in the Company’s Class A Common Stock, the Company’s Class B Common Stock, the S&P 500 Index, and the S&P 500 Food & Beverages Index, and also assumes the reinvestment of all dividends.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*Among Constellation Brands, Inc., the S&P 500 Index, and S&P 500 Food & Beverages Index

21_CB_10KWrap_PMS282U_R1V20.indd 621_CB_10KWrap_PMS282U_R1V20.indd 6 5/4/21 3:59 PM5/4/21 3:59 PM

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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

For the Years Ended

2/28/21 2/29/20 Change

EPS, reported basis $10.23 $(0.07) NM

Acquisitions, divestitures, and related costs 0.12 (0.39)

Restructuring and other strategic business development costs 1.73 2.40

Other (2.11) 7.17

EPS, comparable basis (1) $9.97 $9.12 9%

NM = Not Meaningful

(1) May not sum due to rounding as each item is computed independently

Diluted earnings per share (EPS) growth on a comparable basis is provided because management uses this information in evaluating the results of our core operations and internal goal setting. In addition, we believe this information provides investors valuable insight on underlying business trends and results in order to evaluate year-over-year fi nancial performance. For further information on items excluded from comparable basis EPS, refer to “Comparable Adjustments” and “(Provision for) Benefi t From Income Taxes” under “Results of Operations” under Management’s Discussion and Analysis of Financial Condition and Results of Operations under Item 7 of this Annual Report on Form 10-K.

DIRECTORS AND EXECUTIVE OFFICERS

(As of April 30, 2021)

DIRECTORS

William A. NewlandsPresident and Chief Executive Offi cer,Constellation Brands, Inc.

Robert Sands Executive Chairman,Constellation Brands, Inc.

Richard Sands Executive Vice Chairman, Constellation Brands, Inc.

Christy Clark (1)

Senior Advisor, Bennett Jones LLP

Jennifer M. Daniels (2)

Chief Legal Offi cer and Secretary,Colgate-Palmolive Company

Nicholas I. Fink (2)

Chief Executive Offi cer of Fortune BrandsHome & Security, Inc.

Jerry Fowden (1) (3)

Chairman of the Board, Primo Water Corporation

Ernesto M. Hernández (1)

Former President and Managing Director, General Motors de Mexico, S. de R.L. de C.V.

Susan Somersille Johnson (1)

Chief Marketing Offi cer of Prudential Financial, Inc.

James A. Locke III (3)

Senior Counsel to the law fi rm of Nixon Peabody LLP

Jose Manuel Madero Garza (2)

Independent Business Consultant andFormer Chief Executive Offi cer, Grupo Bepensa

Daniel J. McCarthy (2)

Former President and Chief Executive Offi cer, Frontier Communications Corporation

Judy A. Schmeling (2) (3)

Former Chief Operating Offi cer of HSN, Inc. and Former President of HSN’s Cornerstone Brands

EXECUTIVE OFFICERS

William A. NewlandsPresident and Chief Executive Offi cer,Constellation Brands, Inc.

Robert Sands Executive Chairman,Constellation Brands, Inc.

Richard Sands Executive Vice Chairman, Constellation Brands, Inc.

James O. BourdeauExecutive Vice President and Chief Legal Offi cer, Constellation Brands, Inc.

Garth HankinsonExecutive Vice President and Chief Financial Offi cer, Constellation Brands, Inc.

Robert HansonExecutive Vice President and President,Wine & Spirits Division, Constellation Brands, Inc.

F. Paul HetterichExecutive Vice President and President, Beer Division, Constellation Brands, Inc.

Thomas M. KaneExecutive Vice President and Chief Human Resources Offi cer, Constellation Brands, Inc.

Michael McGrewExecutive Vice President and Chief Communications, Corporate Social Responsibility and Diversity Offi cer,Constellation Brands, Inc.

Mallika MonteiroExecutive Vice President andChief Growth, Strategy, and Digital Offi cer,Constellation Brands, Inc.

James A. Sabia, Jr.Executive Vice President and Managing Director, Beer Division, Constellation Brands, Inc.

(1) Member of Human Resources Committee(2) Member of Audit Committee(3) Member of Corporate Governance Committee

Additional biographical information about the Directors is included in the Proxy Statement relating to the Company’s 2020 annual meetingdistributed with this Annual Report on Form 10-K and posted on www.cbrands.com/annual-meeting.



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INVESTOR INFORMATION

HEADQUARTERS

Constellation Brands, Inc. 207 High Point Drive, Building 100 Victor, NY 14564

585.678.7100 888.724.2169

www.cbrands.com

Investor Center 888.922.2150

STOCK TRANSFER AGENT AND REGISTRAR

Stockholder Inquiries 1-877-810-2237

Stockholder Portal http://shareholder.broadridge.com/stz

Broadridge Corporate Issuer Solutions 1-877-830-4936 - Phone 1-303-974-3789 - International 1-215-553-5402 - Fax M-F, 9 a.m. to 6 p.m. ET

Regular Delivery Broadridge Corporate Issuer Solutions P.O. Box 1342 Brentwood, NY 11717

Overnight Delivery Broadridge Corporate Issuer Solutions ATTN: IWS 1155 Long Island Avenue Edgewood, NY 11717

COMMON STOCK TRADING

The Company’s Class A and Class B Common Stock trade on the New York Stock Exchange (NYSE) under the ticker symbols STZ and STZ.B, respectively. There is no public market for the Company’s Class 1 Common Stock. As of April 30, 2021, there were 501 and 95 holders of record of Class A and Class B Common Stock, respectively, and 12 holders of record of Class 1 Common Stock.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

The statements set forth in this report, which are not historical facts, are forward- looking statements that involve risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, the forward-looking statements. For risk factors associated with the Company and its business, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2021.

COPIES OF FORM 10-K

A copy of our Annual Report on Form 10-K for the fiscal year ended February 28, 2021, filed with the U.S. Securities and Exchange Commission, will be furnished without charge to any stockholder upon written request to Constellation Brands, Inc.’s Investor Relations department at our corporate headquarters address provided on this page. Alternatively, a copy is available on our Constellation Brands website at www.cbrands.com, as well as on the Securities and Exchange Commission’s internet site at www.sec.gov.

VIRTUAL ANNUAL STOCKHOLDERS’ MEETING

The virtual annual meeting is scheduled to be held at 11:00 a.m., Eastern Daylight Time, on Tuesday, July 20, 2021, and is expected to be conducted exclusively via online broadcast. Stockholders will be able to attend the 2021 Virtual Annual Meeting, vote shares, and submit questions during the meeting via the Internet by visiting www.virtualshareholdermeeting.com/STZ2021.

Website references in this annual report are provided as a convenience and do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or available through, the websites. Therefore, such information should not be considered part of this annual report.



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FISCAL YEAR 2021 SUMMARY ANNUAL REPORT ......led by Modelo Especial, which grew double digits to...

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Transcript of FISCAL YEAR 2021 SUMMARY ANNUAL REPORT ......led by Modelo Especial, which grew double digits to...