Constellation Brands STZ · USD

BUSINESS SEGMENT INFORMATION 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 th e Beer se gment, our portfolio consists of high-end imported beer brands and ABAs. We have an exclusive perpetual brand license to produce our Mexican beer portfolio and to import, market, and sell such portfolio in the U.S. In the Wine and Spirits segment, we sell a portfolio that includes higher-end wine brands complemented by certain higher-end spirits brands. Amounts included in the Corporate Operations and Other segment consist of costs of corporate communications, corporate development, corporate finance, corporate strategy and growth , executive management, human resources, internal audit, investor relations, IT, legal, and public affairs, as well as our Canopy investment and investments made through our corporate venture capital function . All costs included in the Corporate Operations and Other segment are general costs that are applicable to the consolidated group and are, therefore, not allocated to the other reportable segments. All costs reported within the Corporate Operations and Other segment are not included in our CODM’s evaluation of the operating income (loss) performance of the other reportable segments. Our CODM is our President and Chief Executive Officer. The business segments reflect how our operations are managed, how resources are allocated, how operating performance is evaluated by senior management, and the structure of our internal financial reporting. Long-lived tangible assets and total asset information by segment is not provided to, or reviewed by, our CODM as it is not used to make strategic decisions, allocate resources, or assess performance. Our CODM utilizes segment comparable operating income (loss) performance in deciding how to deploy capital in line with disciplined and balanced priorities. These priorities largely include investing in our people and our brands, making capital investments and strategic acquisitions, providing a cash dividend program, and from time-time time, repurchasing shares of our common stock. Our CODM also monitors budgeted versus actual results in assessing segment operating performance and understanding underlying business trends.

COMMITMENTS AND CONTINGENCIES Purchase commitments and contingencies We have entered into various long-term contracts in the normal course of business. As of February 28, 2025, the estimated aggregate minimum purchase commitments under these contracts through the date of the last contractual commitment are as follows: Type Commitment Date Amount (in millions) Raw materials and supplies (1) Packaging, malt, grapes, and corn December 2037 $ 5,878.5 Contract services Transportation, IT, marketing, warehousing and bottling, energy contract services, and consumer and market insights January 2032 463.7 Capital expenditures (2) Property, plant, and equipment and contractor and manufacturing services January 2028 205.5 In-process and finished goods inventories Bulk wine and spirits, finished wine case goods, and related contracts September 2030 54.7 $ 6,602.4 (1) Certain grape purchasing arrangements include the purchase of grape production yielded from specified blocks of a vineyard. The actual tonnage and price of grapes that we purchase will vary each year depending on certain factors, including weather, time of harvest, overall market conditions, and the agricultural practices and location of the vineyard. Amounts included herein for the estimated aggregate minimum grape purchase commitments consist of estimates for the purchase of the grapes and the implicit leases of the land. Certain grape purchasing arrangements classified as leases have not resulted in the recognition of right-of-use assets and lease liabilities on our balance sheet due to their variable nature. (2) Consists of purchase commitments entered into primarily in connection with the Mexico Beer Projects. We expect a portion of our purchase commitments under these contracts to transfer with the 2025 Wine Divestitures Transaction. Indemnification liabilities In connection with prior divestitures, we have indemnified respective parties against certain liabilities that may arise subsequent to the divestiture. As of February 28, 2025, and February 29, 2024, these liabilities consist primarily of indemnifications related to certain income tax matters and lease contracts. As of February 28, 2025, and February 29, 2024, the carrying amount of our indemnification liabilities was $18.4 million and $32.9 million, respectively, and are included in other accrued expenses and liabilities and deferred income taxes and other liabilities.

INCOME TAXES Income (loss) before income taxes was generated as follows: For the Years Ended February 28, February 29, February 28, (in millions) Domestic $ (2,633.0) $ (140.2) $ (1,441.6) Foreign 2,550.2 2,362.0 1,825.2 $ (82.8) $ 2,221.8 $ 383.6 The income tax provision (benefit) consisted of the following: For the Years Ended February 28, February 29, February 28, (in millions) Current Federal $ 16.7 $ 152.6 $ (54.3) State 25.9 16.4 15.5 Foreign 116.0 139.7 253.1 Total current 158.6 308.7 214.3 For the Years Ended February 28, February 29, February 28, (in millions) Deferred Federal (436.4) 27.7 82.6 State (73.1) (19.0) 29.9 Foreign 299.2 139.2 95.3 Total deferred (210.3) 147.9 207.8 Income tax provision (benefit) $ (51.7) $ 456.6 $ 422.1 A reconciliation of the total tax provision (benefit) to the amount computed by applying the statutory U.S. federal income tax rate to income before provision for (benefit from) income taxes is as follows: For the Years Ended February 28, 2025 February 29, 2024 February 28, 2023 Amount % of Amount % of Amount % of (in millions, except % of pretax income (loss) data) Income tax provision (benefit) at statutory rate $ (17.4) 21.0 % $ 466.6 21.0 % $ 80.6 21.0 % State and local income taxes, net of federal income tax provision (benefit) (1) (31.2) 37.7 % 35.9 1.6 % 3.4 0.9 % Net income tax benefit from the realization of tax losses related to a prior period divestiture — — % — — % (166.4) (43.4 %) Net income tax benefit from a tax entity classification change — — % (31.2) (1.4 %) — — % Earnings taxed at other than U.S. statutory rate (2) (241.0) 291.1 % (75.9) (3.4 %) (49.2) (12.8 %) Net income tax provision (benefit) from legislative changes (3) — — % (9.6) (0.4 %) 10.9 2.8 % Wine and Spirits-related impairments including the non-deductible portion of the wine and spirits goodwill impairment 253.3 (306.0 %) — — % — — % Excess tax benefits from stock-based compensation awards (4) (5.3) 6.4 % (8.0) (0.4 %) (5.2) (1.4 %) Net income tax provision (benefit) recognized for adjustment to valuation allowance (5) 24.1 (29.1 %) 86.2 3.9 % 557.6 145.4 % Net income tax provision (benefit) in connection with sale of the remaining assets at the canceled Mexicali Brewery (22.2) 26.8 % — — % — — % Net income tax provision (benefit) for various U.S. income tax credits (14.1) 17.0 % — — % — — % Net income tax provision (benefit) in connection with the SVEDKA Divestiture 6.0 (7.2 %) — — % — — % Miscellaneous items, net (3.9) 4.7 % (7.4) (0.

DEFERRED INCOME TAXES AND OTHER LIABILITIES The major components of deferred income taxes and other liabilities are as follows: February 28, February 29, (in millions) Operating lease liability $ 539.1 $ 588.7 Unrecognized tax benefit liabilities 424.3 407.9 Deferred income taxes 92.6 591.5 Derivative liabilities 42.6 8.3 Contract liabilities 10.7 80.2 Other 84.0 127.7 $ 1,193.3 $ 1,804.

STOCK-BASED EMPLOYEE COMPENSATION We have two stock-based employee compensation plans (as further discussed below). Total compensation cost recognized for our stock-based awards and income tax benefits related thereto are as follows: For the Years Ended February 28, February 29, February 28, (in millions) Total compensation cost recognized in our results of operations (1) $ 72.2 $ 63.6 $ 68.5 Income tax benefit related thereto recognized in our results of operations $ 10.6 $ 9.5 $ 8.0 (1) The majority is included in selling, general, and administrative expenses. Long-Term Stock Incentive Plan Under our Long-Term Stock Incentive Plan, nonqualified stock options, restricted stock units, performance share units, and other stock-based awards may be granted to our employees, officers, and directors. The aggregate number of shares of our Class A Stock and Class 1 Stock available for awards under our Long-Term Stock Incentive Plan is 108,000,000 shares. The exercise price, vesting period, and term of nonqualified stock options granted are established by the committee administering the plan (the “Committee”). The exercise price of any nonqualified stock option may not be less than the fair market value of our Class A Stock on the date of grant. Nonqualified stock options generally vest and become exercisable over a three-year period from the date of grant and expire as established by the Committee, but not later than 10 years after the grant date. Grants of restricted stock units, performance share units, and other stock-based awards may contain such vesting periods, terms, conditions, and other requirements as the Committee may establish. Restricted stock unit awards are based on service and generally vest over one one A summary of stock option activity under our Long-Term Stock Incentive Plan is as follows: For the Years Ended February 28, 2025 February 29, 2024 February 28, 2023 Number Weighted Number Weighted Number Weighted Outstanding as of March 1 2,564,288 $ 203.47 3,067,962 $ 194.47 2,906,342 $ 178.62 Granted 124,418 $ 260.11 151,848 $ 226.76 479,758 $ 254.00 Exercised (393,016) $ 162.80 (584,302) $ 160.41 (264,025) $ 123.55 Forfeited (29,237) $ 246.98 (55,351) $ 225.04 (51,102) $ 218.68 Expired (8,420) $ 245.19 (15,869) $ 196.57 (3,011) $ 189.32 Outstanding as of last day of February 2,258,033 $ 212.95 2,564,288 $ 203.47 3,067,962 $ 194.47 Exercisable 1,761,492 $ 203.26 1,702,984 $ 193.68 1,747,884 $ 179.

LEASES General We primarily lease certain vineyards, office and production facilities, warehouses, production equipment, and vehicles. We have concluded that certain grape purchasing arrangements associated with the purchase of grape production yielded from a specified block of a vineyard and certain third-party logistics arrangements contain a lease. Balance sheet location A summary of lease right-of-use assets and liabilities are as follows: Balance Sheet Classification February 28, February 29, (in millions) Assets Operating lease Other assets $ 545.7 $ 615.3 Finance lease Property, plant, and equipment 18.2 18.2 Total right-of-use assets $ 563.9 $ 633.5 Liabilities Current: Operating lease Other accrued expenses and liabilities $ 76.7 $ 89.6 Finance lease Current maturities of long-term debt 4.1 7.5 Non-current: Operating lease Deferred income taxes and other liabilities 539.1 588.7 Finance lease Long-term debt, less current maturities 4.6 10.3 Total lease liabilities $ 624.5 $ 696.1 Lease cost The components of total lease cost are as follows: For the Years Ended February 28, February 29, February 28, (in millions) Operating lease cost $ 112.6 $ 98.2 $ 96.2 Finance lease cost: Amortization of right-of-use assets 7.2 9.4 9.2 Interest on lease liabilities 1.0 1.4 1.1 Short-term lease cost 11.5 10.5 6.6 Variable lease cost 135.2 182.1 176.5 Total lease cost $ 267.5 $ 301.6 $ 289.6 Lease maturities As of February 28, 2025, minimum payments due for lease liabilities for each of the five succeeding fiscal years and thereafter are as follows: Operating Leases Finance Leases (in millions) Fiscal 2026 $ 113.6 $ 4.7 Fiscal 2027 95.8 3.4 Fiscal 2028 83.7 1.3 Fiscal 2029 78.3 — Fiscal 2030 72.7 — Thereafter 384.1 0.1 Total lease payments 828.2 9.5 Less: Interest (212.4) (0.8) Total lease liabilities $ 615.8 $ 8.7 Related party transaction We have a long-term lease for office space with an affiliate of a director. Supplemental information For the Years Ended February 28, February 29, February 28, (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 114.8 $ 99.5 $ 99.7 Operating cash flows from finance leases $ 1.0 $ 1.4 $ 1.1 Financing cash flows from finance leases $ 7.0 $ 9.7 $ 8.8 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 63.0 $ 268.5 $ 63.2 Finance leases $ — $ — $ 10.

ACQUISITIONS, DIVESTITURES, AND RESTRUCTURING Acquisitions Sea Smoke In June 2024, we acquired the Sea Smoke business, including a California-based luxury wine brand, vineyards, and a production facility for $158.7 million, net of closing and post-closing adjustments. This transaction also included the acquisition of goodwill, inventory, and a trademark. The results of operations of Sea Smoke are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition. Austin Cocktails In April 2022, we acquired the remaining 73% ownership interest in Austin Cocktails, which included a portfolio of small batch, ready-to-drink cocktails. This transaction primarily included the acquisition of goodwill and a trademark. In addition, the purchase price for Austin Cocktails includes an earn-out over five years based on performance. The results of operations of Austin Cocktails are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition. Lingua Franca In March 2022, we acquired the Lingua Franca business, including a collection of Oregon-based luxury wines, a vineyard, and a production facility. This transaction also included the acquisition of a trademark and inventory. In addition, the purchase price for Lingua Franca includes an earn-out over seven years based on performance. The results of operations of Lingua Franca are reported in the Wine and Spirits segment and have been included in our consolidated results of operations from the date of acquisition. Divestitures SVEDKA Divestiture On January 6, 2025, we sold the SVEDKA brand and related assets, primarily including inventory and equipment. The net cash proceeds from the SVEDKA Divestiture were used for general corporate purposes, including funding share repurchases, capital expenditures, and repayment of debt. Prior to the SVEDKA Divestiture, we recorded the results of operations of the SVEDKA brand in the Wine and Spirits segment. The following table summarizes the net gain recognized in connection with this divestiture, for the year ended February 28, 2025: (in millions) Cash received from buyer $ 409.2 Net assets sold (139.7) Direct costs to sell (3.5) Gain on sale of business (1) $ 266.0 (1) Included in gain (loss) on sale of business within our consolidated results of operations. Craft Beer Divestitures In June 2023, we completed the Craft Beer Divestitures.

Cybersecurity risk management and strategy We have developed and implemented an enterprise-wide cybersecurity program designed to provide structured and thorough cybersecurity risk management and governance. Our cybersecurity program prioritizes, among other things, prevention of unauthorized access; protection of confidential, personal, or sensitive information; cyber threat detection, assessment, and response; and continuous improvement of our cybersecurity measures. We seek to achieve our cybersecurity program priorities through a multi-pronged approach to address cyber threats and incidents that includes implementation of various industry best practices, proactive monitoring of our IT systems, ongoing employee training, and regular risk assessments. We also maintain cyber insurance coverage to help mitigate a portion of the potential costs in the event of covered events. Our cybersecurity program is aligned with various frameworks for managing cybersecurity risks, such as the National Institute of Standards and Technology Cyber Security Framework for IT systems and International Electrotechnical Commission 62443 which governs cybersecurity for Industrial Control Systems. This program is integrated into our ERM processes. Our ERM function manages enterprise-wide risk and has established a governance structure in charge of continuous risk management. It has defined risk management processes related specifically to cybersecurity, which include targeted cyber risk reviews, annual cyber risk assessments over our IT and operations, and integration with our information security function. We also have a Cyber and Privacy Risk Committee, led by our CISO, which provides strategic and actionable recommendations on cybersecurity topics, issues, and controls to our executive management team, and a Crisis Management Committee, led by our head of ERM, which manages significant cybersecurity events. We rely upon both internal and external resources for evaluating and enhancing our cyber posture. At least annually, our information security and internal audit teams conduct extensive internal and external penetration testing, supplemented by more frequent Purple-team Tests that are designed to identify critical areas of our technical environment and potential vulnerabilities that may need to be addressed.