Constellation Brands Files Q3 2024 Report

TL;DR

**STZ filed its 10-Q for Aug 31, 2024. All good on filings.**

AI Summary

Constellation Brands, Inc. filed its quarterly report for the period ended August 31, 2024. The company, incorporated in Delaware, is registered with the SEC under file number 001-08495 and trades its Class A Common Stock under the symbol STZ on the New York Stock Exchange. The filing indicates that Constellation Brands has met all its reporting requirements for the preceding 12 months and the past 90 days.

Why It Matters

This filing provides investors with the latest financial performance and operational updates for Constellation Brands, a major player in the beverage alcohol industry.

Risk Assessment

Risk Level: low — This is a routine quarterly filing and does not contain any immediate red flags or significant new risks.

Key Players & Entities

• Constellation Brands, Inc. (company) — Registrant
• August 31, 2024 (date) — Quarterly period ended
• 001-08495 (other) — Commission File Number
• STZ (other) — Trading Symbol
• New York Stock Exchange (company) — Exchange

FAQ

Key Financial Figures

• $2.0 billion — ation authorization to repurchase up to $2.0 billion of our publicly traded common stock, ap
• $2.25 b — aggregate revolving credit facility of $2.25 billion, inclusive of October 2022 Credit
• $100.0 million — mber 2023 2023 Canopy Promissory Note C$100.0 million principal amount of 4.25% promissory no
• $550.0 million — 29, 2024 3.60% May 2022 Senior Notes $550.0 million principal amount of 3.60% senior notes
• $0.01 — s 1 Convertible Common Stock, par value $0.01 per share Class A Stock our Class A Co

Filing Documents

• stz-20240831.htm (10-Q) — 1915KB
• stzex101_831202410q.htm (EX-10.1) — 6KB
• stzex102_831202410q.htm (EX-10.2) — 259KB
• stzex311_831202410q.htm (EX-31.1) — 8KB
• stzex312_831202410q.htm (EX-31.2) — 8KB
• stzex321_831202410q.htm (EX-32.1) — 5KB
• stzex322_831202410q.htm (EX-32.2) — 4KB
• stz-20240831_g1.jpg (GRAPHIC) — 113KB
• stz-20240831_g2.jpg (GRAPHIC) — 2352KB
• stz-20240831_g3.jpg (GRAPHIC) — 41KB
• stz-20240831_g4.jpg (GRAPHIC) — 49KB
• stz-20240831_g5.jpg (GRAPHIC) — 53KB
• stz-20240831_g6.jpg (GRAPHIC) — 61KB
• 0000016918-24-000178.txt ( ) — 16523KB
• stz-20240831.xsd (EX-101.SCH) — 38KB
• stz-20240831_cal.xml (EX-101.CAL) — 98KB
• stz-20240831_def.xml (EX-101.DEF) — 322KB
• stz-20240831_lab.xml (EX-101.LAB) — 587KB
• stz-20240831_pre.xml (EX-101.PRE) — 474KB
• stz-20240831_htm.xml (XML) — 1699KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets 1 Consolidated Statements of Comprehensive Income (Loss) 2 Consolidated Statements of Changes in Stockholders' Equity 3 Consolidated Statements of Cash Flows 5

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 1. Basis of Presentation 7 2. Inventories 7 3. Derivative Instruments 7 4. Fair Value of Financial Instruments 10 5. Goodwill 13 6. Intangible Assets 13 7. Other Assets 14 8. Borrowings 15 9. Income Taxes 16 10. Deferred Income Taxes and Other Liabilities 17 11. Stockholders' Equity 17 12. Net Income (Loss) Per Common Share Attributable to CBI 19 13. Comprehensive Income (Loss) Attributable to CBI 19 14. Business Segment Information 22 15. Accounting Guidance Not Yet Adopted 25

Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures About Market Risk 47

Item 3. Quantitative and Qualitative Disclosures About Market Risk 47

Controls and Procedures 48

Item 4. Controls and Procedures 48

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings 49

Item 1. Legal Proceedings 49

Risk Factors 49

Item 1A. Risk Factors 49

Unregistered Sales of Equity Securities and Use of Proceeds 50

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50

Other Information 50

Item 5. Other Information 50

Exhibits 50

Item 6. Exhibits 50 SIGNATURES 54 This Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those set forth in, or implied by, such forward-looking statements. For further information regarding such forward-looking statements, risks, and uncertainties, please see "Information Regarding Forward-Looking Statements" under MD&A. Table of Contents Defined Terms Unless the context otherwise requires, the terms "Company," "CBI," "we," "our," or "us" refer to Constellation Brands, Inc. and its subsidiaries. We use terms in this Form 10-Q and in our Notes that are specific to us or are abbreviations that may not be commonly known or used. Term Meaning $ U.S. dollars 2021 Authorization authorization to repurchase up to $2.0 billion of our publicly traded common stock, approved by our Board of Directors in January 2021 2022 Credit Agreement tenth amended and restated credit agreement, dated as of April 14, 2022, that provides for an aggregate revolving credit facility of $2.25 billion, inclusive of October 2022 Credit Agreement Amendment 2023 Authorization authorization to repurchase up to $2.0 billion of our publicly traded common stock, approved by our Board of Directors in November 2023 2023 Canopy Promissory Note C$100.0 million principal amount of 4.25% promissory note issued to us by Canopy in April 2023, exchanged, in part, for Exchangeable Shares in April 2024 2024 Annual Report our Annual Report on Form 10-K for the fiscal year ended February 29, 2024 3.60% May 2022 Senior Notes $550.0 million principal amount of 3.60% senior notes issued in May 2022, now repaid in full 3-tier distribution channel where products are sold to a distributor (wholesaler) who then sells to a retailer;

Financial Statements our consolidated financial statements and notes thereto included herein

Financial Statements our consolidated financial statements and notes thereto included herein Fiscal 2024 the Company's fiscal year ended February 29, 2024 Fiscal 2025 the Company's fiscal year ending February 28, 2025 Fiscal 2026 the Company's fiscal year ending February 28, 2026 Fiscal 2027 the Company's fiscal year ending February 28, 2027 Fiscal 2028 the Company's fiscal year ending February 29, 2028 Fiscal 2029 the Company's fiscal year ending February 28, 2029 Fiscal 2030 the Company's fiscal year ending February 28, 2030 Form 10-Q this Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2024, unless otherwise specified Four Corners Divestiture sale of the Four Corners craft beer business Funky Buddha Divestiture sale of the Funky Buddha craft beer business GHG greenhouse gas IRA Inflation Reduction Act of 2022 IT information technology MD&A Management's Discussion and Analysis of Financial Condition and Results of Operations under Part I – Item 2. of this Form 10-Q Mexicali Brewery canceled brewery construction project located in Mexicali, Baja California, Mexico, sold the remaining assets classified as held for sale in July 2024 Mexico Beer Projects expansion, optimization, and/or construction activities at the Obregn Brewery, Nava Brewery, and Veracruz Brewery M&T Manufacturers and Traders Trust Company NA not applicable Nava Nava, Coahuila, Mexico Nava Brewery brewery located in Nava Net sales gross sales less promotions, returns and allowances, and excise taxes NM not meaningful Note(s) notes to the consolidated financial statements Obregn Obregn, Sonora, Mexico Obregn Brewery brewery located in Obregn OCI other comprehensive income (loss) October 2022 Credit Agreement Amendment amendment dated as of October 18, 2022, to the 2022 Credit Agreement, effective in April 2024 Pre-issuance hedge contracts treasury lock and/or swap lock contracts designated as cash flow hedges entered into to hedge treasu

FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) (unaudited) August 31, 2024 February 29, 2024 ASSETS Current assets: Cash and cash equivalents $ 64.6 $ 152.4 Accounts receivable 871.3 832.8 Inventories 2,098.6 2,078.3 Prepaid expenses and other 612.3 666.0 Total current assets 3,646.8 3,729.5 Property, plant, and equipment 7,898.8 8,055.2 Goodwill 5,715.4 7,980.3 Intangible assets 2,763.0 2,731.7 Deferred income taxes 1,963.9 2,055.0 Other assets 1,091.2 1,140.0 Total assets $ 23,079.1 $ 25,691.7 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 508.1 $ 241.4 Current maturities of long-term debt 404.7 956.8 Accounts payable 1,099.4 1,107.1 Other accrued expenses and liabilities 901.6 836.4 Total current liabilities 2,913.8 3,141.7 Long-term debt, less current maturities 10,683.6 10,681.1 Deferred income taxes and other liabilities 1,325.8 1,804.3 Total liabilities 14,923.2 15,627.1 Commitments and contingencies CBI stockholders' equity: Class A Stock, $ 0.01 par value – Authorized, 322,000,000 shares; Issued, 212,698,298 shares and 212,698,298 shares, respectively 2.1 2.1 Additional paid-in capital 2,115.2 2,047.3 Retained earnings 12,727.2 13,417.2 Accumulated other comprehensive income (loss) ( 427.0 ) 376.8 Class A Stock in treasury, at cost, 31,207,194 shares and 29,809,881 shares, respectively ( 6,546.7 ) ( 6,100.3 ) Total CBI stockholders' equity 7,870.8 9,743.1 Noncontrolling interests 285.1 321.5 Total stockholders' equity 8,155.9 10,064.6 Total liabilities and stockholders' equity $ 23,079.1 $ 25,691.7 The accompanying notes are an integral part of these statements. Constellation Brands, Inc. Q2 FY 2025 Form 10-Q #WORTHREACHINGFOR I 1

FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS Table of Contents CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions, except per share data) (unaudited) For the Six Months Ended August 31, For the Three Months Ended August 31, 2024 2023 2024 2023 Sales $ 5,999.8 $ 5,752.5 $ 3,139.1 $ 3,053.0 Excise taxes ( 419.1 ) ( 400.8 ) ( 220.2 ) ( 216.2 ) Net sales 5,580.7 5,351.7 2,918.9 2,836.8 Cost of product sold ( 2,665.1 ) ( 2,644.0 ) ( 1,407.1 ) ( 1,386.9 ) Gross profit 2,915.6 2,707.7 1,511.8 1,449.9 Selling, general, and administrative expenses ( 953.4 ) ( 964.3 ) ( 491.2 ) ( 471.2 ) Goodwill impairment ( 2,250.0 ) — ( 2,250.0 ) — Operating income (loss) ( 287.8 ) 1,743.4 ( 1,229.4 ) 978.7 Income (loss) from unconsolidated investments 80.8 ( 435.6 ) ( 1.2 ) ( 20.2 ) Interest expense, net ( 206.8 ) ( 229.5 ) ( 104.0 ) ( 110.6 ) Income (loss) before income taxes ( 413.8 ) 1,078.3 ( 1,334.6 ) 847.9 (Provision for) benefit from income taxes 124.2 ( 238.4 ) 152.2 ( 147.2 ) Net income (loss) ( 289.6 ) 839.9 ( 1,182.4 ) 700.7 Net (income) loss attributable to noncontrolling interests ( 32.4 ) ( 14.0 ) ( 16.6 ) ( 10.7 ) Net income (loss) attributable to CBI $ ( 322.0 ) $ 825.9 $ ( 1,199.0 ) $ 690.0 Comprehensive income (loss) $ ( 1,129.7 ) $ 1,266.0 $ ( 2,013.8 ) $ 901.5 Comprehensive (income) loss attributable to noncontrolling interests 3.9 ( 34.2 ) 20.0 ( 20.0 ) Comprehensive income (loss) attributable to CBI $ ( 1,125.8 ) $ 1,231.8 $ ( 1,993.8 ) $ 881.5 Class A Stock: Net income (loss) per common share attributable to CBI – basic $ ( 1.77 ) $ 4.50 $ ( 6.59 ) $ 3.76 Net income (loss) per common share attributable to CBI – diluted $ ( 1.77 ) $ 4.49 $ ( 6.59 ) $ 3.74 Weighted average common shares outstanding – basic 182.356 183.384 181.947 183.498 Weighted average common shares outstanding – diluted 182.356 184.074 181.947 184.277 Cash dividends declared per common share $ 2.02 $ 1.78 $ 1.01 $ 0.

FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS Table of Contents CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (in millions) (unaudited) Class A Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Non-controlling Interests Total Balance at February 29, 2024 $ 2.1 $ 2,047.3 $ 13,417.2 $ 376.8 $ ( 6,100.3 ) $ 321.5 $ 10,064.6 Comprehensive income (loss): Net income (loss) — — 877.0 — — 15.8 892.8 Other comprehensive income (loss), net of income tax effect — — — ( 9.0 ) — 0.3 ( 8.7 ) Comprehensive income (loss) 884.1 Repurchase of shares — — — — ( 200.0 ) — ( 200.0 ) Dividends declared — — ( 184.7 ) — — — ( 184.7 ) Noncontrolling interest distributions — — — — — ( 17.5 ) ( 17.5 ) Shares issued under equity compensation plans — 5.7 — — 2.4 — 8.1 Stock-based compensation — 17.3 — — — — 17.3 Balance at May 31, 2024 2.1 2,070.3 14,109.5 367.8 ( 6,297.9 ) 320.1 10,571.9 Comprehensive income (loss): Net income (loss) — — ( 1,199.0 ) — — 16.6 ( 1,182.4 ) Other comprehensive income (loss), net of income tax effect — — — ( 794.8 ) — ( 36.6 ) ( 831.4 ) Comprehensive income (loss) ( 2,013.8 ) Repurchase of shares — — — — ( 249.2 ) — ( 249.2 ) Dividends declared — — ( 183.3 ) — — — ( 183.3 ) Noncontrolling interest distributions — — — — — ( 15.0 ) ( 15.0 ) Shares issued under equity compensation plans — 21.2 — — 0.4 — 21.6 Stock-based compensation — 23.7 — — — — 23.7 Balance at August 31, 2024 $ 2.1 $ 2,115.2 $ 12,727.2 $ ( 427.0 ) $ ( 6,546.7 ) $ 285.1 $ 8,155.9 Constellation Brands, Inc. Q2 FY 2025 Form 10-Q #WORTHREACHINGFOR I 3

FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS Table of Contents CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (in millions) (unaudited) Class A Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Non-controlling Interests Total Balance at February 28, 2023 $ 2.1 $ 1,903.0 $ 12,343.9 $ 28.5 $ ( 5,863.9 ) $ 320.3 $ 8,733.9 Comprehensive income (loss): Net income (loss) — — 135.9 — — 3.3 139.2 Other comprehensive income (loss), net of income tax effect — — — 214.4 — 10.9 225.3 Comprehensive income (loss) 364.5 Repurchase of shares — — — — ( 35.0 ) — ( 35.0 ) Dividends declared — — ( 163.1 ) — — — ( 163.1 ) Noncontrolling interest distributions — — — — — ( 11.3 ) ( 11.3 ) Shares issued under equity compensation plans — 0.6 — — 4.1 — 4.7 Stock-based compensation — 14.5 — — — — 14.5 Balance at May 31, 2023 2.1 1,918.1 12,316.7 242.9 ( 5,894.8 ) 323.2 8,908.2 Comprehensive income (loss): Net income (loss) — — 690.0 — — 10.7 700.7 Other comprehensive income (loss), net of income tax effect — — — 191.5 — 9.3 200.8 Comprehensive income (loss) 901.5 Dividends declared — — ( 164.0 ) — — — ( 164.0 ) Noncontrolling interest distributions — — — — — ( 10.0 ) ( 10.0 ) Shares issued under equity compensation plans — 62.6 — — 7.6 — 70.2 Stock-based compensation — 18.1 — — — — 18.1 Balance at August 31, 2023 $ 2.1 $ 1,998.8 $ 12,842.7 $ 434.4 $ ( 5,887.2 ) $ 333.2 $ 9,724.0 The accompanying notes are an integral part of these statements. Constellation Brands, Inc. Q2 FY 2025 Form 10-Q #WORTHREACHINGFOR I 4

FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS Table of Contents CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) For the Six Months Ended August 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ ( 289.6 ) $ 839.9 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Unrealized net (gain) loss on securities measured at fair value 2.5 74.4 Deferred tax provision (benefit) ( 178.5 ) 26.3 Depreciation 220.8 213.7 Stock-based compensation 41.0 32.5 Equity in (earnings) losses of equity method investees and related activities, net of distributed earnings ( 1.9 ) 226.5 Noncash lease expense 57.7 43.3 Impairment of equity method investments 2.1 135.8 Net gain on conversion and exchange to Exchangeable Shares ( 83.3 ) — Goodwill impairment 2,250.0 — Change in operating assets and liabilities, net of effects from purchase and sale of business: Accounts receivable ( 40.6 ) ( 30.0 ) Inventories 14.7 81.3 Prepaid expenses and other current assets ( 77.7 ) ( 47.9 ) Accounts payable 134.5 ( 56.4 ) Deferred revenue 9.7 17.6 Other accrued expenses and liabilities ( 55.4 ) ( 33.9 ) Other ( 133.7 ) 98.9 Total adjustments 2,161.9 782.1 Net cash provided by (used in) operating activities 1,872.3 1,622.0 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant, and equipment ( 703.1 ) ( 582.0 ) Purchase of business, net of cash acquired ( 158.3 ) ( 7.5 ) Investments in equity method investees and securities ( 19.0 ) ( 27.6 ) Proceeds from sale of assets 32.8 14.8 Proceeds from sale of business — 5.4 Other investing activities ( 10.0 ) ( 4.0 ) Net cash provided by (used in) investing activities ( 857.6 ) ( 600.9 ) Constellation Brands, Inc. Q2 FY 2025 Form 10-Q #WORTHREACHINGFOR I 5

FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS Table of Contents CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) For the Six Months Ended August 31, 2024 2023 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of long-term debt — 744.8 Principal payments of long-term debt ( 554.3 ) ( 805.1 ) Net proceeds from (repayments of) short-term borrowings 266.7 ( 697.9 ) Dividends paid ( 368.6 ) ( 327.6 ) Purchases of treasury stock ( 449.2 ) ( 35.0 ) Proceeds from shares issued under equity compensation plans 48.4 86.2 Payments of minimum tax withholdings on stock-based payment awards ( 13.8 ) ( 11.2 ) Payments of debt issuance, debt extinguishment, and other financing costs — ( 5.3 ) Distributions to noncontrolling interests ( 32.5 ) ( 21.3 ) Payment of contingent consideration ( 0.7 ) — Net cash provided by (used in) financing activities ( 1,104.0 ) ( 1,072.4 ) Effect of exchange rate changes on cash and cash equivalents 1.5 1.1 Net increase (decrease) in cash and cash equivalents ( 87.8 ) ( 50.2 ) Cash and cash equivalents, beginning of period 152.4 133.5 Cash and cash equivalents, end of period $ 64.6 $ 83.3 Supplemental disclosures of noncash investing and financing activities Additions to property, plant, and equipment $ 114.7 $ 206.0 The accompanying notes are an integral part of these statements. Constellation Brands, Inc. Q2 FY 2025 Form 10-Q #WORTHREACHINGFOR I 6

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents CONSTELLATION BRANDS, INC. AND SUBSIDIARIES AUGUST 31, 2024 (unaudited) 1. BASIS OF PRESENTATION We have prepared the Financial Statements, without audit, pursuant to the rules and regulations of the SEC applicable to quarterly reporting on Form 10-Q and reflect, in our opinion, all adjustments necessary to present fairly our financial information. All such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements, prepared in accordance with generally accepted accounting principles, have been condensed or omitted as permitted by such rules and regulations. These Financial Statements should be read in conjunction with the consolidated financial statements and related notes included in the 2024 Annual Report. Results of operations for interim periods are not necessarily indicative of annual results. Reclassification We reclassified equity method investments to other assets on our consolidated balance sheet as of February 29, 2024, to conform with current year presentation. 2. 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 and consist of the following: August 31, 2024 February 29, 2024 (in millions) Raw materials and supplies $ 238.2 $ 254.1 In-process inventories 1,121.4 1,096.0 Finished case goods 739.0 728.2 $ 2,098.6 $ 2,078.3 3. DERIVATIVE INSTRUMENTS Overview Our risk management and derivative accounting policies are presented in Notes 1 and 6 of our consolidated financial statements included in our 2024 Annual Report and have not changed significantly for the six months and three months ended August 31, 2024. The aggregate notional value of outstanding derivative instruments is as follows: August 31, 2024 February 29,

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents Credit risk We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the derivative contracts. To manage this risk, we contract only with major financial institutions that have earned investment-grade credit ratings and with whom we have standard International Swaps and Derivatives Association agreements which allow for net settlement of the derivative contracts. We have also established counterparty credit guidelines that are regularly monitored. Because of these safeguards, we believe the risk of loss from counterparty default to be immaterial. In addition, our derivative instruments are not subject to credit rating contingencies or collateral requirements. As of August 31, 2024, the estimated fair value of derivative instruments in a net liability position due to counterparties was $ 21.0 million. If we were required to settle the net liability position under these derivative instruments on August 31, 2024, we would have had sufficient available liquidity on hand to satisfy this obligation. Results of period derivative activity The estimated fair value and location of our derivative instruments on our balance sheets are as follows (see Note 4): Assets Liabilities August 31, 2024 February 29, 2024 August 31, 2024 February 29, 2024 (in millions) Derivative instruments designated as hedging instruments Foreign currency contracts: Prepaid expenses and other $ 64.6 $ 154.1 Other accrued expenses and liabilities $ 19.9 $ 3.5 Other assets $ 64.8 $ 153.5 Deferred income taxes and other liabilities $ 47.7 $ 0.2 Derivative instruments not designated as hedging instruments Foreign currency contracts: Prepaid expenses and other $ 5.0 $ 3.6 Other accrued expenses and liabilities $ 13.5 $ 1.7 Commodity derivative contracts: Prepaid expenses and other $ 3.7 $ 4.8 Other accrued expenses

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents Derivative Instruments in Designated Cash Flow Hedging Relationships Net Gain (Loss) Recognized in OCI Location of Net Gain (Loss) Reclassified from AOCI to Income (Loss) Net Gain (Loss) Reclassified from AOCI to Income (Loss) (in millions) For the Six Months Ended August 31, 2023 Foreign currency contracts $ 149.9 Sales $ ( 0.2 ) Cost of product sold 65.7 Pre-issuance hedge contracts 0.6 Interest expense, net ( 0.3 ) $ 150.5 $ 65.2 For the Three Months Ended August 31, 2024 Foreign currency contracts $ ( 173.3 ) Sales $ 0.2 Cost of product sold 31.5 $ ( 173.3 ) $ 31.7 For the Three Months Ended August 31, 2023 Foreign currency contracts $ 70.6 Sales $ ( 0.2 ) Cost of product sold 39.3 Pre-issuance hedge contracts — Interest expense, net ( 0.1 ) $ 70.6 $ 39.0 We expect $ 39.2 million of net gains, net of income tax effect, to be reclassified from AOCI to our results of operations within the next 12 months. The effect of our undesignated derivative instruments on our results of operations is as follows: Derivative Instruments Not Designated as Hedging Instruments Location of Net Gain (Loss) Recognized in Income (Loss) Net Gain (Loss) Recognized in Income (Loss) (in millions) For the Six Months Ended August 31, 2024 Commodity derivative contracts Cost of product sold $ ( 9.7 ) Foreign currency contracts Selling, general, and administrative expenses ( 26.7 ) $ ( 36.4 ) For the Six Months Ended August 31, 2023 Commodity derivative contracts Cost of product sold $ ( 15.6 ) Foreign currency contracts Selling, general, and administrative expenses 22.5 $ 6.9 For the Three Months Ended August 31, 2024 Commodity derivative contracts Cost of product sold $ ( 24.3 ) Foreign currency contracts Selling, general, and administrative expenses ( 30.7 ) $ ( 55.0 ) Constellation Brands, Inc. Q2 FY 2025 Form 10-Q #WORTHREACHINGFOR I 9

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents

FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents Derivative Instruments Not Designated as Hedging Instruments Location of Net Gain (Loss) Recognized

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