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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

We have elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented. Refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Liquidity and Capital Resources” located in our Form 10-K for the fiscal year ended February 28, 2025, filed on April 23, 2025, for reference to discussion of the fiscal year ended February 29, 2024, the earliest of the three fiscal years presented. This MD&A, which should be read in conjunction with our Financial Statements, is organized as follows:

Overview

This section provides a general description of our business and brief descriptions of Fiscal 2025 goodwill and trademarks impairments, which we believe is important in understanding the results of our operations, financial condition, and potential future trends.

Strategy

This section provides a description of our strategy, including our 2025 Restructuring Initiative, and significant divestitures, acquisitions, and investments.

Results of operations

This section provides an analysis of our results of operations presented on a business segment basis. In addition, a brief description of significant transactions and other items that affect the comparability of the results is provided.

Liquidity and capital resources

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

Critical accounting policies and estimates

This section identifies accounting policies that are considered important to our results of operations and financial condition, require significant judgment, and involve significant management estimates. Our significant accounting policies, including those considered to be critical accounting policies, are summarized in Note 1.

OVERVIEW

Our internal management financial reporting consists of two business divisions: (i) Beer and (ii) Wine and Spirits and we report our operating results in three segments: (i)Beer, (ii)Wine and Spirits, and (iii) Corporate Operations and Other. In the Beer segment, our portfolio consists of high-end imported beer brands and ABAs. We have an exclusive perpetual brand license to produce our beer portfolio and to import, market, and sell such portfolio in the U.S. In the Wine and Spirits segment, we sell a portfolio comprised of exclusively higher-end wine and spirits brands. Amounts included in the Corporate Operations and Other segment consist of costs of corporate communications, corporate development, corporate finance, corporate strategy, executive management, human resources, internal audit, investor relations, IT, legal, and public affairs, as well as our investments such as those made through our corporate venture capital function. All costs included in the Corporate Operations and Other segment are general costs that are applicable to the consolidated group and are, therefore, not allocated to the other reportable segments. All costs reported within the Corporate Operations and Other segment are not included in our CODM’s evaluation of the operating income (loss) performance of the other reportable segments. The business segments reflect how our operations are managed, how resources are allocated, how operating performance is evaluated by senior management, and the structure of our internal financial reporting.

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Goodwill impairment

In connection with continued negative trends within our Wine and Spirits business primarily attributable to our U.S. wholesale market, driven by declines in both the overall wine market and in our then-owned mainstream and premium wine brands, management updated its Fiscal 2025 outlook and latest financial projections for this reporting unit. Based on the aforementioned factors, we performed an interim quantitative assessment, as of August 31, 2024, and a Fiscal 2025 annual quantitative assessment for goodwill impairment which resulted in a $2,740.7 million total goodwill impairment and the carrying value being written down to zero. This loss was included in goodwill and intangible assets impairment within our consolidated results for Fiscal 2025. See Notes 8, 9, and 14 for further discussion.

Trademarks impairment

In connection with the assessment of the same events and circumstances that resulted in the wine and spirits goodwill carrying value being written down to zero, we completed a quantitative assessment of our wine trademarks. As a result, we recognized a $57.0 million trademark impairment on certain then-existing held for sale wine brands. This loss was included in goodwill and intangible assets impairment within our consolidated results of operations for Fiscal 2025. See Note 8 for further discussion.

STRATEGY

Our business strategy for the Beer segment focuses on upholding our leadership position in the U.S. beer market, including as a leader in the high-end segment, and continuing to seek to grow our high-end imported beer brands through maintenance of leading margins, enhancements to our results of operations and operating cash flow, and exploring new avenues for growth. In Fiscal 2027, we intend to continue to increase distribution for key brands, optimize growth through differentiated brand positioning, price pack architecture, and market prioritization as well as invest in the next phase of modular capacity additions necessary to support our anticipated future growth. Modular capacity addition activities continue under our Brewery Projects to align with our anticipated future growth. See “Capital Expenditures” below. Additionally, we continue to focus on consumer-led innovation by creating new line extensions behind celebrated, trusted brands and package formats, as well as new to world brands, that are intended to meet emerging needs.

Our business strategy for the Wine and Spirits segment continues to focus on delivering long-term growth. With our portfolio of exclusively higher-end brands and our continued focus on operational efficiencies, we remain committed to improving margins and driving growth. We intend to expand our brands across U.S. wholesale, international markets, and DTC channels (including hospitality) to maximize our total addressable market opportunity by leveraging our global, omni-channel capabilities. We have a contractual arrangement with Southern Glazer’s Wine and Spirits which consolidated our U.S. distribution and currently represents nearly 70% of our U.S. branded wine and spirits volume.

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

We remain committed to our long-term financial model of: growing sales, expanding margins, and increasing cash flow in order to continue to achieve comparable earnings per share growth as well as our target ratios for (i) comparable net leverage and (ii) dividend payout; investing to support the growth of our business; and delivering additional returns to stockholders through periodic share repurchases. Our results of operations and financial condition have been and may continue to be affected by the dynamic and evolving consumer environment largely driven by ongoing economic uncertainty and additional headwinds from other socioeconomic factors. These factors

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may include subdued spend, depressed sentiment, value-seeking behaviors, and reductions in the discretionary income available to purchase our products among consumers, elevated unemployment, changing prices, inflation, other unfavorable global and regional economic conditions, demographic trends in the U.S., global supply chain disruptions and constraints, geopolitical events and tensions, wars, and military conflicts, including the conflict in the Middle East.

Developments in international trade relations, including significant additional changes in U.S. trade policy and actions which may include threatened, new, and increased tariffs imposed by the U.S. government on other countries, retaliatory tariffs and actions imposed on certain U.S. goods, and subsequent modifications and delays to or invalidation of various tariffs as well as associated litigation and developments have produced heightened uncertainty with respect to trade and tariff policies and regulations affecting trade between the U.S. and other countries, which could continue to alter the global trade environment. For example, the U.S. government has imposed tariffs on certain product imports, including on aluminum and aluminum derivatives, and certain other countries have implemented tariffs and other actions on U.S. goods, such as boycotts and tariffs on certain product imports originating from the U.S. imposed by the Canadian federal and some provincial governments and retaliatory tariffs in other international markets, although some of these tariffs were subsequently modified, delayed, suspended, or invalidated. Various tariffs and other actions negatively impacted our Fiscal 2026 results of operations. In April 2026, the U.S. government removed beer made from malt, which includes our beer products, from the scope of the Section 232 aluminum and aluminum derivative tariffs that had been in place at various rates since February 2025.

We expect some or all of these market conditions and their impacts to continue into Fiscal 2027 which could have a material impact on our results of operations and financial condition. We intend to continue to monitor the dynamic and evolving consumer and socioeconomic environments and their impacts on our business. In addition, we have executed the majority of the work associated the 2025 Restructuring Initiative, which is an enterprise-wide cost savings and restructuring initiative designed to help optimize the performance of our business, including through enhanced organizational efficiency and optimized expenditures across our organization. We also intend to continue our commodity and foreign exchange hedging programs. However, there can be no assurance that we will be able to adequately respond to softer consumer demand trends or fully mitigate rising costs, including as a result of new or increased tariffs, through increased selling prices, cost, productivity, efficiency, and inventory management initiatives, optimized marketing plans, and/or our commodity and foreign exchange hedging programs. Furthermore, to the extent severe weather events that impact our business, such as wildfires, droughts, floods, extreme heat, and/or late frosts, or other weather conditions that constrain purchasing occasions for our consumers, continue to occur or accelerate in future periods, it could have a material impact on our results of operations and financial condition.

2025 Restructuring Initiative

We have implemented the 2025 Restructuring Initiative which is expected to yield over $200 million in net annualized cost savings by Fiscal 2028. The majority of the work associated with the 2025 Restructuring Initiative was executed within Fiscal 2026. The 2025 Restructuring Initiative is now estimated to result in nearly $130 million of cumulative pre-tax costs once all phases are fully implemented. In connection with the 2025 Restructuring Initiative, we recognized $72.2 million of pre-tax restructuring costs in Fiscal 2026 and $121.9 million of cumulative pre-tax costs since the inception of this initiative. These costs were included in selling, general, and administrative costs within our consolidated results. For additional information on the 2025 Restructuring Initiative, see Note 3.

Divestitures, Acquisitions, and Investments

Beer segment

Mexicali Brewery sale

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

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Wine and Spirits segment

2025 Wine Divestitures

On June 2, 2025, we sold and, in certain instances, exclusively licensed the trademarks of a portion of our wine and spirits business, primarily centered around our then-owned mainstream wine brands and associated inventory, wineries, vineyards, offices, and facilities. We received $845.9 million of cash proceeds, which were used for the repayment of debt.

SVEDKA Divestiture

On January 6, 2025, we sold the SVEDKA brand and related assets, primarily including inventory and equipment. We received $409.2 million of cash proceeds, which were used for general corporate purposes, including funding share repurchases, capital expenditures, and repayment of debt.

Nelson’s Green Brier investment

In October 2024, we purchased the remaining 25% noncontrolling interest in Nelson’s Green Brier, a portfolio of Tennessee-based craft bourbon and whiskey products.

Sea Smoke acquisition

In June 2024, we acquired the Sea Smoke business, including a California-based luxury wine brand, vineyards, and a production facility. This transaction also included the acquisition of goodwill, inventory, and a trademark.

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

Corporate Operations and Other segment

Corporate ventures investments

As of August 31, 2025, February 28, 2025, and August 31, 2024, we evaluated certain equity method investments and other securities measured at fair value, made through our corporate venture capital function, and determined there were other-than-temporary impairments due to business underperformance, for the respective periods.

Exchangeable Shares

We own 26.3 million Exchangeable Shares. As of November 30, 2024, we evaluated our Exchangeable Shares for impairment primarily due to the business and industry factors that led to the decline in Canopy’s common share price since the April 2024 conversion of our then-existing Canopy common shares and exchange of a portion of the principal amount of a then-existing promissory note issued to us by Canopy for Exchangeable Shares. Following the April 2024 conversion and exchange, we recognized an initial $83.3 million net gain based on the fair value of our Exchangeable Shares. Due to the continued decline in Canopy’s common share price, as of February 28, 2025, we evaluated our Exchangeable Shares for an additional impairment. We concluded that an impairment did exist, and accordingly, our Exchangeable Shares were written down to their estimated fair value of $21.2 million, resulting in a $76.1 million impairment for Fiscal 2025.

The total $7.2 million net gain in connection with our Exchangeable Shares was included in income (loss) from unconsolidated investments within our consolidated results for Fiscal 2025.

For additional information on these divestitures, acquisitions, and investments, refer to Notes 2, 6, 8, and 11.

RESULTS OF OPERATIONS

Financial Highlights

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

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Fiscal 2026 compared to Fiscal 2025

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

Operating income increased largely due to (i) Fiscal 2025 Wine and Spirits-related impairments, including goodwill, trademarks, and then-existing assets held for sale, and (ii) continued successful execution of efficiency and cost optimization initiatives within the Beer segment, partially offset by (i) net sales declines in both the Wine and Spirits and Beer segments, (ii) the Fiscal 2025 net gain related to the SVEDKA Divestiture, and (iii) Fiscal 2026 losses associated with asset impairment and related expenses.

Net income (loss) attributable to CBI and diluted net income (loss) per common share attributable to CBI each increased largely due to the items discussed above and a decrease in interest expense, partially offset by aFiscal 2026 provision for income taxes as compared to a Fiscal 2025 benefit from income taxes.

Comparable Adjustments

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

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

(in millions)

Cost of product sold

Net gain (loss) on undesignated commodity derivative contracts $ 23.6 $ (0.3)

Settlements of undesignated commodity derivative contracts 3.4 26.8

Strategic business reconfiguration costs (4.8) (10.7)

Flow through of inventory step-up (4.1) (10.2)

Other gains (losses) — 0.6

Comparable Adjustments, Cost of product sold 18.1 6.2

Selling, general, and administrative expenses

Transition services agreements activity (35.7) (22.6)

Strategic business reconfiguration costs (10.4) (29.6)

Chief Executive Officer severance and transitions benefits (7.8) —

Other gains (losses) 27.9 (14.6)

Goodwill and intangible assets impairment — (2,797.7)

Asset impairment and related expenses (109.8) (478.0)

Gain (loss) on sale of business (31.9) 266.0

Comparable Adjustments, Operating income (loss) $ (221.8) $ (3,120.0)

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Cost of product sold

Undesignated commodity derivative contracts

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

Strategic business reconfiguration costs

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

Flow through of inventory step-up

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

Selling, general, and administrative expenses

2025 Restructuring Initiative

We recognized costs in connection with an enterprise-wide cost savings and restructuring initiative designed to help optimize the performance of our business.

Transition services agreements activity

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

Strategic business reconfiguration costs

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

Chief Executive Officer severance and transition benefits

We recognized costs primarily in connection with severance benefits in accordance with the terms of a pre-existing employment agreement.

Other gains (losses)

We recognized other gains (losses) primarily from (i) net decreases in estimated fair values of contingent liabilities associated with prior period acquisitions, (ii) a net gain from the sale of assets (Fiscal 2026), and (iii) a net loss on foreign currency as a result of the resolution of various tax examinations and assessments (Fiscal 2025).

Goodwill and intangible assets impairment

We recognized goodwill and intangible assets impairments in connection with continued negative trends within our Wine and Spirits business primarily attributable to our U.S. wholesale market, driven by declines in both the overall wine market and in our then-owned mainstream and premium wine brands. For additional information, refer to Notes 8, 9, and 14.

Asset impairment and related expenses

Largely in connection with (i) the commitment to dismantling and abandonment of certain aged long-lived assets at the Obregón Brewery (Fiscal 2026), (ii) the 2025 Wine Divestitures we recognized contract liabilities and inventory obsolescence expenses, partially offset by changes in then-existing net assets held for sale (Fiscal 2026), and

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(iii) certain then-existing wine and spirits assets that met held for sale criteria (Fiscal 2025). For additional information, refer to Notes 2, 6, and 8.

Gain (loss) on sale of business

We recognized a net gain (loss) largely from the (i) 2025 Wine Divestitures (Fiscal 2026) and (ii) SVEDKA Divestiture (Fiscal 2025). For additional information, refer to Note 2.

Income (loss) from unconsolidated investments

We recognized income (loss) primarily from (i) unrealized net losses from the changes in fair value of our securities measured at fair value, (ii) impairments of certain other equity method investments, and (iii) a net gain in connection with our Exchangeable Shares (Fiscal 2025). For additional information, refer to Notes 8 and 11.

Business Segments

Net sales

Fiscal2026 Fiscal2025 DollarChange PercentChange

(in millions)

Wine and Spirits:

Beer segment Fiscal2026 Fiscal2025 DollarChange PercentChange

(in millions, branded product, 24-pack, 12-ounce case equivalents)

Depletions (2.1 %)

The decrease in Beer net sales is due to a (i) $323.0 million decline in shipment volume and (ii) $29.8 million of unfavorable product mix primarily from a shift in package types, partially offset by $128.2 million of favorable impact from pricing in select markets. We believe our net sales were impacted by the economic uncertainty and socioeconomic factors discussed above. We expect shipment volume to generally align with depletion volume for Fiscal 2027.

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Wine and Spirits segment Fiscal2026 Fiscal2025 DollarChange PercentChange

(in millions, branded product, 9-liter case equivalents)

Shipments

Organic U.S. Wholesale (1) (2) 6.3 6.8 (7.4 %)

Depletions (1) (2) (4.3 %)

(1)Includes adjustments to remove volumes associated with the SVEDKA Divestiture for the period March 1, 2024, through January 5, 2025.

(2)Includes adjustments to remove volumes associated with the 2025 Wine Divestitures for the period June 2, 2024, through February 28, 2025.

The decrease in Wine and Spirits net sales is due to $711.2 million from the Wine and Spirits Divestitures that are no longer part of our business and a $133.9 million decrease in organic net sales. The decrease in organic net sales is driven by (i) a $43.0 million decrease in branded wine and spirits shipment volume, (ii) $38.9 million of unfavorable product mix, (iii) $30.0 million of lower contractual distributor payments as compared to Fiscal 2025, and (iv) a $17.6 million decrease from strategic pricing actions taken on certain brands. The decrease in branded wine and spirits shipment volume and unfavorable mix are primarily attributable to our U.S. wholesale market, including the change in cadence of shipments to better align with consumer demand following the shift to a portfolio of exclusively higher-end brands. Additionally, we believe our branded wine and spirits shipment volume was negatively impacted by both tariffs imposed by the U.S. government and by retaliatory tariffs and actions in certain international markets. For Fiscal 2027, we expect depletion volume to outpace shipment volume driven by mutually agreed upon inventory reductions with key distributors following the 2025 Wine Divestitures.

Gross profit

Fiscal2026 Fiscal2025 DollarChange PercentChange

(in millions)

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Gross profit as a percent of net sales decreased to 51.6% for Fiscal 2026 compared with 52.1% for Fiscal 2025. This decrease was largely due to rate decline of (i) 185 basis points and approximately 20 basis points from higher cost of product sold within the Beer and Wine and Spirits segments, respectively, (ii) approximately 30 basis points as a result of lower contractual distributor payments and strategic pricing actions within the Wine and Spirits segment, and (iii) 20 basis points of lower organic branded Wine and Spirits shipment volume. These declines were largely offset by rate growth of (i) approximately 110 basis points driven by divestitures of lower-margin brands, (ii) 75 basis points of favorable impact from beer pricing, and (iii) a favorable change in Comparable Adjustments, contributing 15 basis points.

Selling, general, and administrative expenses

Fiscal2026 Fiscal2025 DollarChange PercentChange

(in millions)

Selling, general, and administrative expenses as a percent of net sales increased to 20.2% for Fiscal 2026 as compared with 19.1% for Fiscal 2025. The increase is driven by (i) approximately 145 basis points of unfavorable impact from the Wine and Spirits Divestitures and (ii) approximately 70 basis points of rate growth from higher Beer

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selling, general, and administrative expenses coupled with the decline in Beer net sales, partially offset by (i) approximately 70 basis points and 15 basis points of rate decline from decreases in selling, general, and administrative expenses within the Wine and Spirits and Corporate Operations and Other segments, respectively, and (ii) a favorable change in Comparable Adjustments, contributing 20 basis points of rate decline.

Operating income (loss)

Fiscal2026 Fiscal2025 DollarChange PercentChange

(in millions)

Income (loss) from unconsolidated investments

Fiscal2026 Fiscal2025 DollarChange PercentChange

(in millions)

Equity method investments impairment (1.5) (8.7) 7.2 83 %

Net gain in connection with Exchangeable Shares — 7.2 (7.2) NM

Income (loss) from unconsolidated investments $ 9.0 $ (26.3) $ 35.3 134 %

Interest expense, net

Interest expense, net decreased to $352.6 million for Fiscal 2026 as compared to $411.4 million for Fiscal 2025. This decrease of $58.8 million, or 14%, is largely due to approximately $805 million of lower average borrowings and approximately 5 basis points of lower weighted average interest rates. For additional information, refer to Note 13.

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(Provision for) benefit from income taxes

The (provision for) benefit from income taxes increased to $(621.0) million for Fiscal 2026 from $51.7 million for Fiscal 2025. Our effective tax rate for Fiscal 2026 was 26.1% as compared with 62.4% for Fiscal 2025. In comparison to prior year, our effective tax rate was largely impacted by net income tax impacts resulting from:

•(i) Fiscal 2025 non-deductible portion of the Wine and Spirits goodwill impairment, (ii) Fiscal 2026 adjustments to tax attributes, (iii) resolution of tax examinations and assessments related to prior periods, and (iv) SVEDKA Divestiture; partially offset by

•(i) changes to valuation allowances and (ii) effective tax rates applicable for foreign businesses.

For additional information, refer to Note 14.

We expect our reported effective tax rate for Fiscal 2027 to be in the range of 19% to 21%.

Net income (loss) attributable to CBI

Net income (loss) attributable to CBI increased to $1,686.7 million for Fiscal 2026 from $(81.4) million for Fiscal 2025. This increase of $1,768.1 millionis largely attributable to Fiscal 2025 Wine and Spirits-related impairments, including goodwill, trademarks, and then-existing assets held for sale, partially offset by the (i) net sales declines in both the Wine and Spirits and Beer segments and (ii) provision for income taxes as compared to the benefit from income taxes for Fiscal 2025.

LIQUIDITY AND CAPITAL RESOURCES

General

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

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

We have an agreement with a financial institution for payment services and to facilitate a voluntary supply chain finance program through this participating financial institution. The program is available to certain of our suppliers allowing them the option to manage their cash flow. We are not a party to the agreements between the participating financial institution and the suppliers in connection with the program. Our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted. For additional information, refer to Note 17.

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Cash Flows

(in millions)

Net cash provided by (used in):

Effect of exchange rate changes on cash and cash equivalents 4.8 0.1 4.7

Net increase (decrease) in cash and cash equivalents $ 34.3 $ (84.3) $ 118.6

Operating activities

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

(in millions)

Goodwill and intangible assets impairment — 2,797.7 (2,797.7)

The $51.0 million net change in operating assets and liabilities was largely driven by (i) higher accounts receivable for the Beer segment as a result of timing of sales and collections, as well as (ii) lower accounts payable for both the Beer and Wine and Spirits segments, driven by the timing of purchases and lower purchasing activity following the Wine and Spirits Divestitures, respectively, and (iii) lower other accrued expenses and liabilities for the Wine and Spirits segment resulting from contract buyouts and reduced promotions each resulting from the Wine and Spirits Divestitures. These changes were partially offset by lower (i) accounts receivables for the Wine and Spirits segment due to lower net sales, reflecting the impact of the Wine and Spirits Divestitures, (ii) prepaid expenses and other current assets for the Beer segment driven by the timing of collections for recoverable value-added taxes, and (iii) Beer segment inventory levels. Additionally, net cash provided by operating activities was positively impacted by lower Fiscal 2026 income tax payments as compared to Fiscal 2025 following the resolution of various tax examinations and assessments.

Investing activities

Net cash provided by (used in) investing activities increased to $16.5 million for Fiscal 2026 from $(974.8) million for Fiscal 2025. This increase of $991.3 million, or 102%, was primarily due to (i) $441.3 million of higher proceeds from sale of business, driven by the 2025 Wine Divestitures, (ii) $339.1 million of reduced capital expenditures for Fiscal 2026 as compared to Fiscal 2025, and (iii) $158.7 million of reduced business acquisition activity for Fiscal 2026, driven by the June 2024 acquisition of the Sea Smoke wine business.

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Business acquisitions and divestitures consist primarily of the following:

Acquisitions

•None •Sea Smoke

Divestitures

•2025 Wine Divestitures •SVEDKA Divestiture

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

Financing activities

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

(in millions)

Distributions to noncontrolling interests (62.5) (57.5) (5.0)

Payment of contingent consideration (1.5) (0.7) (0.8)

Purchase of noncontrolling interest — (16.2) 16.2

Debt

Total debt outstanding as of February 28, 2026, amounted to $10,568.5 million, a decrease of $929.2 million, or 8%, from February 28, 2025. This decrease consisted of:

Debt issuance Debt repayment

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Bank facilities

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

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

Senior notes

Issuance

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

In May 2025, we issued the 4.80% May 2025 Senior Notes. Proceeds from this offering, net of discount and debt issuance costs, of $495.9 million were used for general corporate purposes, including repayment of commercial paper and other indebtedness, working capital, funding capital expenditures, and other business opportunities.

Repayment and Redemption

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

General

The majority of our outstanding borrowings as of February 28, 2026, consisted of fixed-rate senior unsecured notes, with maturities ranging from calendar 2026 to calendar 2050, as follows:

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Additionally, we have a commercial paper program which provides for the issuance of up to an aggregate principal amount of $2.25 billion of commercial paper. Our commercial paper program is backed by unused commitments under our revolving credit facility under our 2025 Credit Agreement. Accordingly, outstanding borrowings under our commercial paper program reduce the amount available under our revolving credit facility.

We do not have purchase commitments from buyers for our commercial paper and, therefore, our ability to issue commercial paper is subject to market demand. If the commercial paper market is not available to us for any reason when commercial paper borrowings mature, we expect to utilize unused commitments under our revolving credit facility under our 2025 Credit Agreement to repay commercial paper borrowings. We do not expect that fluctuations in demand for commercial paper will affect our liquidity given our borrowing capacity available under our revolving credit facility.

We had the following remaining borrowing capacity available under our 2025 Credit Agreement:

(in millions)

(1)Net of outstanding revolving credit facility borrowings and outstanding letters of credit under our 2025 Credit Agreement and outstanding borrowings under our commercial paper program (excluding unamortized discount) of $272.1 million and $199.5 million as of February 28, 2026, and April 17, 2026, respectively.

The financial institutions participating in our 2025 Credit Agreement have complied with prior funding requests and we believe they will comply with any future funding requests. However, there can be no assurances that any particular financial institution will continue to do so.

As of February 28, 2026, we and our subsidiaries were subject to covenants that are contained in our 2025 Credit Agreement, including those restricting the incurrence of additional subsidiary indebtedness, additional liens, mergers and consolidations, transactions with affiliates, and sale and leaseback transactions, in each case subject to numerous conditions, exceptions, and thresholds. The financial covenants are limited to a minimum interest coverage ratio and a maximum net leverage ratio, both as defined in our 2025 Credit Agreement. As of February 28, 2026, under our 2025 Credit Agreement, the minimum interest coverage ratio was 2.5x and the maximum net leverage ratio was 4.0x.

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

As of February 28, 2026, we were in compliance with our covenants under our 2025 Credit Agreement and our indentures, and have met all debt payment obligations.

For further discussion and presentation of our borrowings and available sources of borrowing, refer to Note 13.

Common Stock Dividends

On April 8, 2026, our Board of Directors declared a quarterly cash dividend of $1.03 per share of Class A Stock and $0.93 per share of Class 1 Stock payable on May 14, 2026, to stockholders of record of each class as of the close of business on April 29, 2026. We expect to return approximately $700 million to stockholders in Fiscal 2027 through cash dividends.

We currently expect to continue to pay a regular quarterly cash dividend to stockholders of our common stock in the future, but such payments are subject to approval of our Board of Directors and are dependent upon our financial

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condition, results of operations, capital requirements, and other factors, including those set forth under Item 1A. “Risk Factors” of this Form 10-K.

Share Repurchase Program

In April 2025, our Board of Directors authorized a repurchase of up to $4.0 billion of our publicly traded common stock under the 2025 Authorization, which expires in February 2028.

During Fiscal 2026, we repurchased 5,652,107 shares of Class A Stock pursuant to the 2025 Authorization at an aggregate cost of $924.1 million, through open market transactions. Subsequent to February 28, 2026, we repurchased 641,481 shares of Class A Stock pursuant to the 2025 Authorization at an aggregate cost of $98.7 million, through open market transactions and a 10b5-1 Trading Plan. These aggregate costs exclude the impact of Federal excise tax owed pursuant to the IRA. We primarily used cash on hand to pay the purchase price for the repurchased shares.

As of April 17, 2026, total shares repurchased are as follows:

Class A Stock

(in millions, except share data)

(1)As of April 17, 2026, $2,977.2 million remains available for future share repurchases, excluding the impact of Federal excise tax owed pursuant to the IRA.

Share repurchases under the 2025 Authorization may be accomplished at management’s discretion from time to time based on market conditions, our cash and debt position, and other factors as determined by management. Shares may be repurchased through open market or privately negotiated transactions. We may fund future share repurchases with cash generated from operations, proceeds from borrowings, and/or divestiture proceeds. Any repurchased shares will become treasury shares, including shares previously repurchased under the 2025 Authorization. Additionally, share repurchases are dependent upon our financial condition, results of operations, capital requirements, and other factors, including those set forth under Item 1A. “Risk Factors” of this Form 10-K.

For additional information, refer to Note 18.

Capital Resources

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

The following sets forth information about our outstanding obligations at February 28, 2026. For a detailed discussion of the items noted in the following table, refer to Notes 12 through 17.

Short-term payments Long-term payments Total

(in millions)

Contractual obligations

Short-term borrowings $ 272.0 $ — $ 272.0

Interest payments on short-term debt $ 0.3 $ — $ 0.3

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Short-term payments Long-term payments Total

(in millions)

Purchase obligations

In-process and finished goods inventories $ 8.0 $ 13.9 $ 21.9

(1)Interest payments on long-term debt do not include interest related to finance lease obligations as amounts are not material.

(2)Other long-term liabilities do not include payments for unrecognized tax benefit liabilities of $241.0 million due to the uncertainty of the timing of future cash flows associated with these unrecognized tax benefit liabilities. In addition, other long-term liabilities do not include expected payments for interest and penalties associated with unrecognized tax benefit liabilities as amounts are not material. For a detailed discussion of these items, refer to Note 14.

(3)Contracts to purchase equipment and services primarily related to the Brewery Projects. For further information about these purchase obligations, refer to “Capital Expenditures” below.

Capital Expenditures

Capital expenditures for Fiscal 2026 totaled $875.0 million, of which $762.4 million related to the Beer segment. These expenditures were driven by continued investments in the Brewery Projects. We plan to spend approximately $800 million for capital expenditures in Fiscal 2027, almost entirely focused on our Brewery Projects. The remaining planned Fiscal 2027 capital expenditures consist of improvements to existing operating facilities and replacements of existing equipment and/or buildings. Management reviews the capital expenditure program periodically and modifies it as required to meet current and projected future business needs.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect amounts reported in our consolidated financial statements. Estimates are based on historical experience, observance of trends in the industry, information provided by our Customers, and information available from other outside sources, as appropriate. We review estimates to ensure that they appropriately reflect changes in our business on an ongoing basis. Certain policies are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by management to determine appropriate assumptions to be used in certain estimates; as a result, they are subject to an inherent degree of uncertainty. See Note 1 for a description of our significant accounting policies. Our critical accounting estimates include:

Goodwill and other intangible assets

Goodwill and other intangible assets are classified into three categories: (i) goodwill, (ii) intangible assets with definite lives subject to amortization, and (iii) intangible assets with indefinite lives not subject to amortization. For intangible assets with definite lives, impairment testing is required if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite lives and for goodwill, impairment testing is required at least annually or more frequently if events or changes in circumstances indicate that these assets might be impaired. We may perform a qualitative evaluation prior to a quantitative test to determine if an impairment exists. However, if the

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results of the qualitative evaluation are inconclusive or suggest an impairment may exist, we must proceed to the quantitative test. The qualitative evaluation is an assessment of factors, including market conditions, industry changes, actual results as compared to forecasted results, or the timing of recent acquisitions and/or divestitures. The quantitative test estimates the fair value utilizing assumptions and projections regarding items such as future cash flows, revenues, earnings, and other factors. The factors and assumptions used reflect our estimates and are based on historical trends, projections, and assumptions, including expectations of future economic and competitive conditions that are used in current strategic operating plans; however, these are subject to change as a result of changing market conditions. If these estimates or their related assumptions change in the future, we may be required to recognize an impairment loss for these assets. The recognition of any resulting impairment loss could have a material adverse impact on our financial statements.

We perform annual impairment tests and re-evaluate the useful lives of other intangible assets with indefinite lives at the annual impairment test measurement date of January 1 or when circumstances arise that indicate a possible impairment or change in useful life might exist.

Goodwill

We currently have one reporting unit with goodwill: the Beer segment. Prior to Fiscal 2026, we had two reporting units with goodwill: the Beer segment and the Wine and Spirits segment. The goodwill associated with the Wine and Spirits segment was fully impaired during Fiscal 2025. Therefore, in the fourth quarter of Fiscal 2026, we performed our annual goodwill impairment analysis only for the Beer reporting unit, using the qualitative assessment. We determined it is more likely than not the fair value of our Beer reporting unit exceeded its carrying value, and therefore no goodwill impairment was recognized related to this test.

In the fourth quarter of Fiscal 2025, we performed our annual goodwill impairment analysis for the Beer reporting unit and Wine and Spirits reporting unit using both the qualitative and quantitative assessments. No indication of impairment was noted for our Beer reporting unit utilizing the qualitative assessment, as the estimated fair value of goodwill exceeded its carrying value.

During the second quarter of Fiscal 2025, in connection with continued negative trends within our Wine and Spirits business primarily attributable to our U.S. wholesale market, driven by declines in both the overall wine market and in our mainstream and premium wine brands, management updated its Fiscal 2025 outlook for this reporting unit. The updated forecast indicated it was more likely than not the fair value of the Wine and Spirits reporting unit might be below its carrying value. Accordingly, we performed an interim quantitative assessment for goodwill impairment. This assessment indicated the carrying value of the Wine and Spirits reporting unit exceeded its estimated fair value, resulting in a $2,250.0 million goodwill impairment. During the fourth quarter of Fiscal 2025, we performed our annual impairment analysis and updated our estimate of the Wine and Spirits reporting unit fair value to reflect the latest financial projections and an increase in the discount rate. As a result, we recognized an additional $490.7 million goodwill impairment to write-off the remaining goodwill balance for the Wine and Spirits reporting unit as of February 28, 2025.

When performing a quantitative assessment for impairment of goodwill, we measure the amount of impairment by calculating the amount by which the carrying value exceeds its estimated fair value. The estimated fair value of our reporting units are determined based on the discounted cash flow model. The most significant assumptions used in the discounted cash flow model for the Wine and Spirits reporting unit in Fiscal 2025 were: (i) a 9% discount rate (for the interim assessment) and a 10% discount rate (for the annual assessment), (ii) a 1.5% expected long-term growth rate, and (iii) the annual cash flow projections.

For Fiscal 2024, as a result of our annual goodwill impairment analyses, we concluded that there were no indications of impairment for either of our reporting units.

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Other intangible assets

Our intangible assets consist primarily of customer relationships and trademarks obtained through business acquisitions. Customer relationships are amortized over their estimated useful lives. The trademarks that were determined to have indefinite useful lives are not amortized. Using the quantitative assessment, our trademarks are evaluated for impairment by comparing the carrying value of the trademarks to their estimated fair value. The estimated fair value of trademarks is calculated based on an income approach using the relief from royalty method.

In connection with our annual trademark analysis, we performed a qualitative assessment for the imported beer, wine, and spirits trademarks and concluded that there were no indications of impairment for these trademark units for Fiscal 2026.

We performed a qualitative assessment in Fiscal 2025, as part of our annual analysis, for the imported beer and spirits trademarks and concluded that there were no indications of impairment for these trademark units. We re-evaluated the wine units of account in contemplation of the 2025 Wine Divestitures and determined it was appropriate to have two units of account, (i) then-existing held for sale brands and (ii) remaining brands. We performed a quantitative impairment test for the then-existing held for sale brands and remaining brands trademark units as certain continued negative trends indicated the fair value may not exceed its carrying value. When using the quantitative assessment, the estimated fair value of the trademarks is calculated based on an income approach using the relief from royalty method.

The most significant assumptions used in the relief from royalty method to determine the estimated fair value of intangible assets with indefinite lives in connection with this impairment testing in Fiscal 2025 were: (i) a 3% royalty rate (then-existing held for sale brands trademark unit) and a 7% royalty rate (remaining brands trademark unit), (ii) an 11% discount rate, (iii) a 1.5% expected long-term growth rate, and (iv) the annual revenue projections. This assessment indicated (i) the carrying value of the then-existing held for sale brands trademark unit exceeded its estimated fair value, resulting in a $57.0 million trademark impairment as of February 28, 2025, and (ii) the estimated fair value of the remaining brands trademark unit exceeded its carrying value. We proceeded to perform sensitivities in our impairment testing of the remaining brands trademarks by (i) decreasing the royalty rate 50 basis points, (ii) increasing the discount rate 50 basis points, (iii) decreasing the expected long-term growth rate 50 basis points, and (iv) decreasing the annual revenue projections 100 basis points. None of these sensitivities individually would have resulted in a conclusion that the trademarks in our remaining brands reporting unit were impaired.

We performed quantitative assessments in Fiscal 2024 for the imported beer, wine, and spirits trademarks. There were no indications of impairment for any of our trademarks for Fiscal 2024.

Divestitures

When some, but not all of a reporting unit that constitutes a business is disposed of, some of the goodwill of the reporting unit should be allocated to the portion of the reporting unit being disposed of. The allocation of goodwill is based on the relative fair values of the portion of the reporting unit being disposed of and the portion of the reporting unit remaining. This approach requires a determination of the fair value of both the business being disposed and the businesses retained within the reporting unit.

For Fiscal 2025, our estimate of fair value for the SVEDKA Divestiture was determined based on the expected proceeds from the applicable transaction. The components sold were a part of the Wine and Spirits segment and were included in that reporting unit through the date of divestiture. Goodwill was allocated to the assets based on the relative fair value of the business being sold compared to the relative fair value of the reporting unit. Goodwill not allocated to assets associated with the divestiture remained in the Wine and Spirits reporting unit.

For additional information on our goodwill and intangible assets refer to Notes 2, 8, 9, 10, and 14.

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Accounting for income taxes

We estimate our deferred tax assets and liabilities, income taxes payable, provision for income taxes, and unrecognized tax benefit liabilities based upon various factors including, but not limited to, historical pretax operating income, future estimates of pretax operating income, differences between book and tax treatment of various items of income and expense, interpretation of tax laws, and tax planning strategies. We are subject to income taxes in Italy, Malta, Mexico, New Zealand, Switzerland, the U.S., and other jurisdictions. We are regularly audited by federal, state, and foreign tax authorities, but a number of years may elapse before an uncertain tax position is audited and finally resolved.

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

We recognize our deferred tax assets and liabilities based upon the expected future tax outcome of amounts recognized in our results of operations. If necessary, we recognize a valuation allowance on deferred tax assets when it is more likely than not they will not be realized. We evaluate our ability to realize the tax benefits associated with deferred tax assets by assessing the adequacy of future expected taxable income, historical and projected operating results, and the availability of prudent and feasible tax planning strategies. The realization of deferred tax assets is evaluated by jurisdiction and the realizability of these assets can vary based on the character of the tax attribute and the carryforward periods specific to each jurisdiction. We believe it is more likely than not the results of future operations will generate sufficient taxable income to realize our existing deferred tax assets, net of valuation allowances. Changes in the realizability of our deferred tax assets will be reflected in our effective tax rate in the period in which they are determined.

Change in Accounting Guidance

Accounting guidance adopted for Fiscal 2026 did not have a material impact on our consolidated financial statements. For information on recently adopted accounting guidance and accounting guidance not yet adopted, see Note 1.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of our global operating, investment, acquisition, divestiture, and financing activities, we are exposed to market risk associated with changes in foreign currency exchange rates, commodity prices, and interest rates. These risks may be influenced by, among other factors, trade policies, tariffs, and foreign or domestic legal and regulatory requirements. To manage the volatility relating to these risks, we periodically purchase and/or sell derivative instruments including foreign currency forward and option contracts, commodity swap contracts, cross-currency swap contracts, interest rate swap contracts, and Pre-issuance hedge contracts. We use derivative instruments to reduce earnings and cash flow volatility resulting from shifts in market rates, as well as to hedge economic exposures. We do not enter into derivative instruments for trading or speculative purposes.

Foreign currency and commodity price risk

Foreign currency derivative instruments are or may be used to hedge existing foreign currency denominated assets and liabilities, forecasted foreign currency denominated sales/purchases to/from third parties as well as intercompany sales/purchases, intercompany principal and interest payments, and in connection with investments, acquisitions, or divestitures outside the U.S. As of February 28, 2026, we had exposures to foreign currency risk primarily related to the Mexican peso, New Zealand dollar, Canadian dollar, and euro. We aim to hedge 100% of our balance sheet exposures. As of February 28, 2026, 73% of our forecasted transactional exposures for the year ending February 28, 2027, were hedged.

Commodity derivative instruments are or may be used to hedge forecasted commodity purchases from third parties as either economic hedges or accounting hedges. As of February 28, 2026, exposures to commodity price risk which we are currently hedging include aluminum, corn, diesel fuel, and natural gas prices. Approximately 79% of our forecasted transactional exposures for the year ending February 28, 2027, were hedged as of February 28, 2026.

We have performed a sensitivity analysis to estimate our exposure to market risk of foreign exchange rates and commodity prices reflecting the impact of a hypothetical 10% adverse change in the applicable market. The volatility of the applicable rates and prices is dependent on many factors which cannot be forecasted with reliable accuracy. Gains or losses from the revaluation or settlement of the related underlying positions would substantially offset such gains or losses on the derivative instruments. The aggregate notional value, estimated fair value, and sensitivity analysis for our open foreign currency and commodity derivative instruments are summarized as follows:

(in millions)

Net investment hedge contracts $ 145.5 $ — $ (6.7) $ — $ 14.6 $ —

Interest rate risk

The estimated fair value of our fixed interest rate debt is subject to interest rate risk, credit risk, and foreign currency risk. In addition, we also have variable interest rate debt outstanding (primarily SOFR-based), certain of which includes a fixed margin subject to the same risks identified for our fixed interest rate debt.

As of February 28, 2026, and February 28, 2025, we had $50.0 million and $275.0 million, respectively, of outstanding cash flow designated, Pre-issuance hedge contracts designed to minimize interest rate volatility on our future debt

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issuances. There were no other cash flow designated or undesignated interest rate swap contracts outstanding as of February 28, 2026 or February 28, 2025.

We have performed a sensitivity analysis to estimate our exposure to market risk of interest rates reflecting the impact of a hypothetical 1% increase in the prevailing interest rates. The volatility of the applicable rates is dependent on many factors which cannot be forecasted with reliable accuracy.

The aggregate notional value, estimated fair value, and sensitivity analysis for our outstanding fixed-rate debt, including current maturities, are summarized as follows:

(in millions)

A 1% hypothetical change in the prevailing interest rates would have increased interest expense on our variable interest rate debt by $2.8 million and $5.3 million for the years ended February 28, 2026, and February 28, 2025, respectively.

For additional discussion on our market risk, refer to Notes 7 and 8.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 28, 2026

Page

Management’s Annual Report on Internal Control Over Financial Reporting 57

Reports of Independent Registered Public Accounting Firm (PCAOB ID 185) 58

Consolidated Balance Sheets 62

Consolidated Statements of Comprehensive Income (Loss) 63

Consolidated Statements of Changes in Stockholders’ Equity 64

Consolidated Statements of Cash Flows 65

Notes to Consolidated Financial Statements

2 . Acquisitions and Divestitures 72

3 . Restructuring 73

4 . Inventories 74

5 . Prepaid Expenses and Other 75

6 . Property, Plant, and Equipment, Net 75

7 . Derivative Instruments 75

8 . Fair Value of Financial Instruments 79

10 . Intangible Assets 83

12 . Other Accrued Expenses and Liabilities 85

15 . Deferred Income Taxes and Other Liabilities 95

17 . Commitments and Contingencies 97

18 . Stockholders' Equity 98

19 . Stock-Based Employee Compensation 100

20 . Net Income (Loss) Per Common Share Attributable to CBI 104

21 . Accumulated Other Comprehensive Income (Loss) 105

22 . Significant Customers and Concentration of Credit Risk 107

23 . Business Segment Information 107

24 . Selected Quarterly Financial Information (unaudited) 107

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Management’s Annual Report on Internal Control Over Financial Reporting

Management of Constellation Brands, Inc. and subsidiaries (the Company) is responsible for establishing and maintaining an adequate system of internal control over financial reporting. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time.

Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Based on that evaluation, management concluded that the Company’s internal control over financial reporting was effective as of February 28, 2026.

The effectiveness of the Company’s internal control over financial reporting has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein.

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Constellation Brands, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Constellation Brands, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of February 28, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 28, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of February 28, 2026 and 2025, the related consolidated statements of comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended February 28, 2026, and the related notes (collectively, the consolidated financial statements), and our report dated April 22, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Rochester, New York

April 22, 2026

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Constellation Brands, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Constellation Brands, Inc. and subsidiaries (the Company) as of February 28, 2026 and 2025, the related consolidated statements of comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended February 28, 2026, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2026 and 2025, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended February 28, 2026, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of February 28, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 22, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Unrecognized tax benefits

As discussed in Notes 1 and 14 to the consolidated financial statements, the Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination. The Company has recorded unrecognized tax benefits of $254.1 million as of February 28, 2026.

We identified the evaluation of certain of the Company’s unrecognized tax benefits as a critical audit matter. Specifically, complex auditor judgment, including the involvement of tax and valuation professionals with specialized

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skills and knowledge, was required in evaluating the Company’s interpretation of tax law and its estimate of the ultimate resolution of its tax positions.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to evaluate uncertain tax positions. This included controls related to the interpretation of tax law, its application in the liability estimation process, and the review of activity that could result in changes to the Company’s unrecognized tax benefits. We involved tax professionals with specialized skills and knowledge, who assisted in evaluating the Company’s interpretation of tax law and tax authority rulings and in performing an independent assessment of certain of the Company’s tax positions and the amount of unrecognized tax benefit, if any, and comparing the results to the Company’s assessment. We also involved valuation professionals with specialized skills and knowledge, who assisted in assessing certain transfer pricing studies for compliance with applicable laws and regulations.

/s/ KPMG LLP

We have served as the Company’s auditor since 2002.

Rochester, New York

April 22, 2026

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CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

ASSETS

Current assets:

Cash and cash equivalents $ 102.4 $ 68.1

Assets held for sale — 913.5

Property, plant, and equipment, net 8,520.9 7,409.8

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current maturities of long-term debt 603.6 1,402.0

Other accrued expenses and liabilities 854.0 886.7

Long-term debt, less current maturities 9,692.9 9,289.0

Deferred income taxes and other liabilities 1,130.9 1,193.3

Commitments and contingencies (Note 17)

CBI stockholders’ equity:

Accumulated other comprehensive income (loss) 423.2 (662.7)

Total liabilities and stockholders’ equity $ 21,900.5 $ 21,652.3

The accompanying notes are an integral part of these statements.

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CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions, except per share data)

For the Years Ended

NET INCOME (LOSS) ATTRIBUTABLE TO CBI

Goodwill and intangible assets impairment — (2,797.7) —

Asset impairment and related expenses (109.8) (478.0) —

Gain (loss) on sale of business (31.9) 266.0 (15.1)

Income (loss) from unconsolidated investments 9.0 (26.3) (511.8)

(Provision for) benefit from income taxes (621.0) 51.7 (456.6)

Net (income) loss attributable to noncontrolling interests (70.1) (50.3) (37.8)

Net income (loss) attributable to CBI $ 1,686.7 $ (81.4) $ 1,727.4

CLASS A STOCK

Cash dividends declared per common share $ 4.08 $ 4.04 $ 3.56

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CBI

Other comprehensive income (loss), net of income tax effect:

Unrealized net gain (loss) on derivative instruments 277.5 (256.6) 70.0

Pension/postretirement adjustments (5.3) 2.2 1.2

Comprehensive income (loss) attributable to CBI $ 2,772.6 $ (1,120.9) $ 2,075.7

The accompanying notes are an integral part of these statements.

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CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in millions)

Comprehensive income (loss):

Comprehensive income (loss) 2,129.5

Repurchase of shares — — — — (249.7) — (249.7)

Dividends declared — — (654.1) — — — (654.1)

Noncontrolling interest distributions — — — — — (52.6) (52.6)

Shares issued under equity compensation plans — 80.6 — — 13.3 — 93.9

Stock-based compensation — 63.7 — — — — 63.7

Comprehensive income (loss):

Comprehensive income (loss) (1,114.8)

Dividends declared — — (732.4) — — — (732.4)

Noncontrolling interest distributions — — — — — (57.5) (57.5)

Shares issued under equity compensation plans — 33.5 — — 18.7 — 52.2

Stock-based compensation — 71.9 — — — — 71.9

Purchase of noncontrolling interest — (8.1) — — — (17.3) (25.4)

Comprehensive income (loss):

Comprehensive income (loss) 2,886.8

Repurchase of shares — — — — (924.1) — (924.1)

Dividends declared — — (715.7) — — — (715.7)

Noncontrolling interest distributions — — — — — (62.5) (62.5)

Shares issued under equity compensation plans — (27.2) — — 26.5 — (0.7)

Stock-based compensation — 68.3 — — — — 68.3

The accompanying notes are an integral part of these statements.

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For the Years Ended

CASH FLOWS FROM OPERATING ACTIVITIES

Unrealized net (gain) loss on securities measured at fair value 5.0 47.9 85.4

Equity method investments impairment 1.5 8.7 136.1

Asset impairment and related expenses 109.8 478.0 —

Goodwill and intangible assets impairment — 2,797.7 —

Prepaid expenses and other current assets 3.4 (89.4) (76.5)

Other accrued expenses and liabilities (148.0) (48.9) (115.9)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of business, net of cash acquired — (158.7) (7.5)

Investments in equity method investees and securities (18.0) (35.0) (34.6)

Other investing activities — (11.7) (2.0)

Net cash provided by (used in) investing activities 16.5 (974.8) (1,285.9)

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For the Years Ended

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of long-term debt 997.7 — 1,144.4

Net proceeds from (repayments of) short-term borrowings (534.8) 565.3 (923.9)

Proceeds from shares issued under equity compensation plans 7.7 73.8 104.5

Distributions to noncontrolling interests (62.5) (57.5) (52.6)

Payment of contingent consideration (1.5) (0.7) (14.9)

Purchase of noncontrolling interest — (16.2) —

Effect of exchange rate changes on cash and cash equivalents 4.8 0.1 (0.6)

Net increase (decrease) in cash and cash equivalents 34.3 (84.3) 18.9

Cash and cash equivalents, beginning of year 68.1 152.4 133.5

Cash and cash equivalents, end of year $ 102.4 $ 68.1 $ 152.4

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the year

Interest, net of interest capitalized $ 346.2 $ 416.1 $ 418.6

Income taxes, net of refunds received $ 173.6 $ 197.1 $ 333.5

Noncash investing and financing activities

Additions to property, plant, and equipment $ 125.2 $ 143.1 $ 269.6

Purchase of noncontrolling interest $ — $ 9.2 $ —

The accompanying notes are an integral part of these statements.

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CONSTELLATION BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 28, 2026

1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

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

BASIS OF PRESENTATION

Principles of consolidation

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

Revision of prior period Note

We revised a prior period Note disclosure to correct an immaterial error in the presentation of changes in outstanding obligations under our supply chain finance program (see Note 17).

Equity method investments

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

Management’s use of estimates

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue recognition

Our revenue (referred to in our financial statements as “sales”) consists primarily of the sale of beer, wine, and spirits domestically in the U.S. Sales of products are for cash or otherwise agreed-upon credit terms. Our payment terms vary by location and customer, however, the time period between when revenue is recognized and when payment is due is not significant. Our Customers consist primarily of wholesale distributors. Our revenue generating activities have a single performance obligation and are recognized at the point in time when control transfers and our obligation has been fulfilled, which is when the related goods are shipped or delivered to the customer, depending upon the method of distribution, and shipping terms. We have elected to treat shipping as a fulfillment activity. Revenue is

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measured as the amount of consideration we expect to receive in exchange for the sale of our product. Our sales terms do not allow for a right of return except for matters related to any manufacturing defects on our part. Amounts billed to Customers for shipping and handling are included in sales.

As noted, the majority of our revenues are generated from the domestic sale of beer, wine, and spirits to wholesale distributors in the U.S. Our other revenue generating activities include the export of certain of our products to select international markets, as well as the sale of our products through state alcohol beverage control agencies and 3-tier eCommerce and DTC channels. We have evaluated these other revenue generating activities under the disaggregation disclosure criteria and concluded that they are immaterial for separate disclosure. See Note 23 for disclosure of net sales by product type.

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

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

Cost of product sold

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

Selling, general, and administrative expenses

The types of costs included in selling, general, and administrative expenses consist predominantly of advertising and non-manufacturing administrative and overhead costs. We expense advertising (hereafter referred to as “marketing”) costs as incurred, shown, or distributed. Marketing expense for the years ended February 28, 2026, February 28, 2025, and February 29, 2024, was $867.4 million, $931.2 million, and $853.5 million, respectively.

Foreign currency translation

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

Cash and cash equivalents

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

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Inventories

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

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

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

Property, plant, and equipment, net

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

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

Depreciation

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

Years

Land improvements and vineyards 15 to 32

Buildings and improvements 10 to 50

Machinery, equipment, and motor vehicles 3 to 35

Derivative instruments

We enter into derivative instruments to manage our exposure to fluctuations in foreign currency exchange rates, commodity prices, and interest rates. We enter into derivatives for risk management purposes only, including derivatives designated in hedge accounting relationships as well as those derivatives utilized as economic hedges. We do not enter into derivatives for trading or speculative purposes. We recognize all derivatives as either assets or liabilities and measure those instruments at estimated fair value (see Notes 7 and 8). We present our derivative positions gross on our balance sheets.

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

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

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

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

Fair value of financial instruments

We calculate the estimated fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available, we use standard pricing models for various types of financial instruments (such as forwards, options, swaps, and convertible debt) which take into account the present value of estimated future cash flows (see Note 8).

Goodwill and other intangible assets

Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. A reporting unit is an operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by segment management. We review our goodwill and indefinite-lived intangible assets annually for impairment, or sooner, if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We use January 1 as our annual impairment test measurement date. Indefinite-lived intangible assets consist principally of trademarks. Intangible assets determined to have a finite life, primarily customer relationships, are amortized over their estimated useful lives and are subject to review for impairment when events or circumstances indicate that the carrying amount of an asset may not be recoverable. Note 10 provides a summary of intangible assets segregated between amortizable and nonamortizable amounts.

Income taxes

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

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

Leases

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

The right-of-use asset and lease liability are initially measured at the present value of future lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, our secured incremental borrowing rate. The incremental borrowing rates are determined using a portfolio approach based on

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publicly available information in connection with our unsecured borrowing rates. We elected to recognize expenses for leases with a term of 12 months or less on a straight-line basis over the lease term and not to recognize these short-term leases on the balance sheet.

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

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

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

Indemnification liabilities

We have indemnified respective parties against certain liabilities that may arise in connection with certain acquisitions and divestitures. Indemnification liabilities are recognized when probable and estimable and included in deferred income taxes and other liabilities (see Note 17).

Stock-based employee compensation

We have two stock-based employee compensation plans (see Note 19). We apply grant date fair-value-based measurement methods in accounting for our stock-based payment arrangements and recognize all costs resulting from stock-based payment transactions, net of expected forfeitures, ratably over the requisite service period. Stock-based awards are subject to specific vesting conditions, generally time vesting, or upon retirement, disability, or death of the employee (as defined by the plan), if earlier. For awards granted to retirement-eligible employees, we recognize compensation expense ratably over the period from the date of grant to the date of retirement-eligibility.

Net income (loss) per common share attributable to CBI

We have one class of common stock with a material number of shares outstanding: Class A Stock. In addition, we have another class of common stock with an immaterial number of shares outstanding: Class 1 Stock.

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

For additional information on net income (loss) per common share, see Note 20.

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ACCOUNTING PRONOUNCEMENTS

Recently adopted accounting pronouncement

Income taxes

In December 2023, the FASB issued a standard to enhance the transparency and decision usefulness of income tax disclosures. This standard requires public companies to disclose (i) specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, (ii) the amount of income taxes paid disaggregated by federal, state, and foreign taxes and disaggregated by material individual jurisdictions, and (iii) income from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense from continuing operations disaggregated by federal, state, and foreign. We adopted these disclosures for our annual period ending February 28, 2026, and applied these amendments prospectively (see Note 14).

Accounting pronouncements not yet adopted

Disaggregation of income statement expenses

In November 2024, the FASB issued a standard requiring disaggregated information about certain income statement expense line items to be disclosed on an annual and interim basis. We are required to adopt these disclosures for our annual period ending February 29, 2028, with early adoption permitted and this standard may be applied retrospectively. We expect this standard to impact our disclosures with no material impacts to our results of operations, cash flows, or financial condition.

2. ACQUISITIONS AND DIVESTITURES