Constellation Brands

“In our beer business, we focus 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.”

Annual report 2026A · The company itself

“We compete on the basis of quality, price, brand recognition and reputation, and distribution strength. Our products compete with other alcoholic and non-alcoholic beverages for consumer purchases, as well as shelf space in retail stores, restaurant presence, and wholesaler attention.”

Annual report 2026A · The company itself

“As a result, in response to Customer demand which precedes consumer purchases, our beer sales have historically been highest during the first and second quarters of our fiscal year, which correspond to the Spring and Summer periods in the U.S.”

Annual report 2026A · The company itself

“Consumer preferences, behaviors, perception, and sentiment may shift due to a variety of factors, including changes in taste preferences and leisure, dining, and beverage purchasing and consumption patterns, U.S. demographic trends, changing market dynamics, including consumer-led premiumization, moderation, and betterment trends, pricing, perceived value, branding, marketing, and reputational considerations, geopolitical events and tensions, trends involving environmental sustainability and CSR matters, and other negative trends impacting our products, business, and the entire beverage alcohol industry, such as elevated product supply or inventory levels.”

Annual report 2026A · The company itself

“These factors 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.”

Annual report 2026A · The company itself

“We believe our net sales were impacted by the economic uncertainty and socioeconomic factors discussed above.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“The countries in which we operate impose duties, excise taxes, and/or other taxes on beverage alcohol products, and/or on certain raw materials used to produce our beverage alcohol products in varying amounts.”

Annual report 2026A · The company itself

“Significant new or increased tariffs, import and excise duties, or other taxes on or impacting beverage alcohol products, including raw and packaging materials, particularly on imports from Mexico, Italy, and New Zealand, and any additional retaliatory tariffs and actions imposed by those governments on product imports from the U.S., could have a material adverse effect on our business, liquidity, financial condition, and/or results of operations.”

Annual report 2026A · The company itself

“Meanwhile, escalating geopolitical events, tensions, and trade disputes, have resulted and may continue to result in additional sanctions, tariffs, import-export restrictions, boycotts, or trade wars.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“The increase in cost of product sold is largely attributable to approximately $10 million in tariffs imposed under IEEPA and unfavorable fixed cost absorption related to decreased production levels as compared to Fiscal 2025.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“We also intend to continue our commodity and foreign exchange hedging programs.”

Annual report 2026A · The company itself

“These activities, when combined with any retaliatory actions that have or may be taken by other countries, have impacted and could continue to pose risk to our business as well as the global economy, such as by shifting consumer behaviors, inhibiting sales, increasing costs, causing further economic and supply chain disruptions (including impacts on prices and supply of certain commodities, such as aluminum and aluminum derivatives, corn, crude oil, natural gas, and steel) and inflationary pressures, and reducing economic activity.”

Annual report 2026A · The company itself

“These factors 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.”

Annual report 2026A · The company itself

“Unfavorable global or regional economic conditions, including trade barriers, tariffs, trade wars, economic slowdown or recession, instability in the banking sector, and the disruption, volatility, and tightening of credit and capital markets, as well as unemployment, tax increases, governmental spending cuts, or continuing high levels of inflation, could affect consumer spending patterns and purchases of our products.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“BUSINESS INTRODUCTION We are an international producer and marketer of beer, wine, and spirits with operations in the U.S., Mexico, New Zealand, and Italy with powerful, consumer-connected, high-quality brands like Modelo Especial, Corona Extra, Pacifico, Victoria, Kim Crawford, Ruffino, The Prisoner Wine Company, Robert Mondavi Winery, Mi CAMPO, and High West.”

Annual report 2026A · The company itself

“Wine and Spirits segment We are a higher-end wine and spirits company in the U.S. market, with a portfolio that we believe is positioned for long-term growth.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“In the Wine and Spirits segment, we sell a portfolio comprised of exclusively higher-end wine and spirits brands.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“The strength of our brands makes us a supplier of choice to many of our consumers and our Customers, which include wholesale distributors and retailers.”

Annual report 2026A · The company itself

“In the U.S., we sell our products principally to wholesalers for resale to retailers and directly to government agencies. We have an exclusive arrangement with one wholesaler that generates a large portion of our branded U.S. wine and spirits net sales, and we have one wholesaler for our beer portfolio which, through multiple entities, represents approximately one-quarter of our consolidated net sales.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“The inability of Customers and suppliers to access liquidity could impact our ability to produce and distribute our products.”

Annual report 2026A · The company itself

“The strength of our brands makes us a supplier of choice to many of our consumers and our Customers, which include wholesale distributors and retailers.”

Annual report 2026A · The company itself

“In the U.S., our products are primarily distributed by wholesale distributors, and we generally use separate distribution networks for (i) our beer portfolio and (ii) our wine and spirits portfolio.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“We also intend to continue our commodity and foreign exchange hedging programs.”

Annual report 2026A · The company itself

“We have an exclusive arrangement with one wholesaler that generates a large portion of our branded U.S. wine and spirits net sales, and we have one wholesaler for our beer portfolio which, through multiple entities, represents approximately one-quarter of our consolidated net sales.”

Annual report 2026A · The company itself

“California has endured and may continue to experience prolonged drought conditions which have resulted in the imposition of certain restrictions on water usage that could recur. Certain areas of California have also experienced wildfires and flooding in recent years. If these conditions or restrictions persist and/or increase in severity, it could have an adverse effect upon those operations.”

Annual report 2026A · The company itself

“The supply, on-time availability, and cost of raw, packaging, and other materials, energy, and other commodities have been and may continue to be affected by many factors beyond our control, including economic factors, legal and regulatory requirements, including tariffs and extended producer responsibility and post-consumer recycled content obligations, supply chain disruptions, inflationary pressures, market demand, geopolitical events and tensions, wars, military conflicts, including the conflict in the Middle East, weather events or natural or man-made disasters, including droughts, storms, and wildfires, plant diseases, and theft.”

Annual report 2026A · The company itself

“Several of our vineyards and production and distribution facilities, including certain California and Oregon wineries, are in areas prone to seismic activity. Additionally, we have various vineyards and wineries in California and Oregon which have experienced wildfires, landslides, and/or severe winter storms.”

Annual report 2026A · The company itself

“There has been much public discussion related to concerns that GHGs may have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. Severe weather events and natural disasters, such as our experiences with wildfires, drought, and/or flooding in California and Oregon, severe winter storms in California, Texas, or Mexico, or late frosts or flooding in New Zealand, and climate change may negatively affect agricultural productivity in the regions from which we source our various agricultural raw materials or the energy powering our production facilities.”

Annual report 2026A · The company itself

“Various diseases, pests, fungi, viruses, drought, frosts, wildfires, and certain other weather conditions or the effects of climate conditions, such as smoke taint sustained during the 2020 U.S. West Coast wildfires or the late frost experienced in New Zealand in calendar 2021, could affect the quality and quantity of barley, hops, grapes, and other agricultural raw materials available and decrease the supply and quality of our products.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“FINANCIAL AND ECONOMIC RISKS Indebtedness, credit ratings, interest rate fluctuations, and credit market disruptions or volatility We have incurred indebtedness to finance investments and acquisitions, refinance other indebtedness, fund beer operations capacity additions and other capital expenditures, pay cash dividends, repurchase shares of our common stock, and fund other general corporate purposes, including working capital. In the future, we may continue to incur indebtedness for any or all of these activities.”

Annual report 2026A · The company itself

“We are exposed to risks associated with interest rate fluctuations, including for our variable interest rate debt, and disruption or volatility in the credit markets.”

Annual report 2026A · The company itself

“The current interest rate environment is elevated relative to the interest rates on certain of our outstanding indebtedness that will be maturing over the next several years. If we experience reduced access to credit or higher future interest rates to refinance our maturing indebtedness, to incur additional indebtedness, or on our variable interest rate exposures, it could increase our overall interest expense and adversely affect our liquidity and capital resources.”

Annual report 2026A · The company itself

“In addition, certain of our debt and derivative financial instruments have, or in the future could have, interest rates that are tied to reference rates, such as SOFR.”

Annual report 2026A · The company itself

“Unfavorable global or regional economic conditions, including trade barriers, tariffs, trade wars, economic slowdown or recession, instability in the banking sector, and the disruption, volatility, and tightening of credit and capital markets, as well as unemployment, tax increases, governmental spending cuts, or continuing high levels of inflation, could affect consumer spending patterns and purchases of our products.”

Annual report 2026A · The company itself

“If we do not comply with the obligations contained in our senior credit facility, our existing or future indentures, or other loan agreements, we could be in default under such debt facilities or agreements. In such an event, the holders of our debt could elect to declare as due and payable all amounts outstanding under those instruments.”

Annual report 2026A · The company itself

“RESOURCES AND AVAILABILITY OF PRODUCTION MATERIALS The principal components in the production of our beer brands include water; agricultural products, such as yeast and grains; and packaging materials, which include glass, aluminum, and cardboard. For our beer brands, packaging materials are the largest cost component of production, with glass bottles representing the largest cost component of our packaging materials.”

Annual report 2026A · The company itself

“For Fiscal 2026, the package format mix of our beer volume sold in the U.S. was as follows: As part of our long-term beer glass sourcing strategy, we are a partner in an equally-owned joint venture with Owens-Illinois, one of the leading manufacturers of glass containers in the world. The joint venture owns a state-of-the-art Glass Plant adjacent to our Nava Brewery. The Glass Plant supplies approximately 60% of the total annual glass bottle supply for our beer brands.”

Annual report 2026A · The company itself

“In the U.S., the glass bottle industry is highly concentrated with only a small number of producers. We have traditionally obtained, and continue to obtain, our glass requirements from a limited number of producers under long-term supply arrangements. Currently, one producer supplies most of our glass container requirements for our U.S. operations.”

Annual report 2026A · The company itself

“Our breweries, wineries, and distilleries all use large amounts of various packaging materials, including glass, aluminum, cardboard, and other paper products.”

Annual report 2026A · The company itself

“Our breweries, wineries, and distilleries are also dependent upon an adequate supply of glass bottles. Glass bottle costs are one of our largest components of cost of product sold. The Glass Plant produces a majority of the total annual glass bottle supply for our beer brands, and we have a small number of other suppliers of glass bottles for our beer brands.”

Annual report 2026A · The company itself

“In the U.S., glass bottles have only a small number of producers, and one producer supplies a majority of our glass container requirements for our U.S. wine and spirits operations.”

Annual report 2026A · The company itself

“Significant new or increased tariffs, import and excise duties, or other taxes on or impacting beverage alcohol products, including raw and packaging materials, particularly on imports from Mexico, Italy, and New Zealand, and any additional retaliatory tariffs and actions imposed by those governments on product imports from the U.S., could have a material adverse effect on our business, liquidity, financial condition, and/or results of operations.”

Annual report 2026A · The company itself

“Our breweries, wineries, and distilleries all use large amounts of various packaging materials, including glass, aluminum, cardboard, and other paper products.”

Annual report 2026A · The company itself

“Meanwhile, we have two aluminum can suppliers that provide all of our total annual requirements for our beer brands, with one of those suppliers providing a majority of our aluminum can requirements.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“The increased cost of product sold is primarily due to (i) $58.3 million in tariffs, largely on aluminum imports under Section 232, (ii) $58.2 million of unfavorable fixed cost absorption related to decreased production levels as compared to Fiscal 2025, and (iii) a $14.6 million increase in brewery costs, including maintenance and utilities.”

Annual report 2026A · The company itself

“These activities, when combined with any retaliatory actions that have or may be taken by other countries, have impacted and could continue to pose risk to our business as well as the global economy, such as by shifting consumer behaviors, inhibiting sales, increasing costs, causing further economic and supply chain disruptions (including impacts on prices and supply of certain commodities, such as aluminum and aluminum derivatives, corn, crude oil, natural gas, and steel) and inflationary pressures, and reducing economic activity.”

Annual report 2026A · The company itself

“The supply, on-time availability, and cost of raw, packaging, and other materials, energy, and other commodities have been and may continue to be affected by many factors beyond our control, including economic factors, legal and regulatory requirements, including tariffs and extended producer responsibility and post-consumer recycled content obligations, supply chain disruptions, inflationary pressures, market demand, geopolitical events and tensions, wars, military conflicts, including the conflict in the Middle East, weather events or natural or man-made disasters, including droughts, storms, and wildfires, plant diseases, and theft.”

Annual report 2026A · The company itself

“Decreased availability of our raw materials may increase our cost of product sold.”

Annual report 2026A · The company itself

“These factors 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.”

Annual report 2026A · The company itself

“Unfavorable global or regional economic conditions, including trade barriers, tariffs, trade wars, economic slowdown or recession, instability in the banking sector, and the disruption, volatility, and tightening of credit and capital markets, as well as unemployment, tax increases, governmental spending cuts, or continuing high levels of inflation, could affect consumer spending patterns and purchases of our products.”

Annual report 2026A · The company itself

“California has endured and may continue to experience prolonged drought conditions which have resulted in the imposition of certain restrictions on water usage that could recur. Certain areas of California have also experienced wildfires and flooding in recent years. If these conditions or restrictions persist and/or increase in severity, it could have an adverse effect upon those operations.”

Annual report 2026A · The company itself

“Mexico recently reformed certain laws related to water rights, which altered the country’s regulatory framework governing water resources. Among the changes were a prohibition on the transfer of water concessions between private parties, elimination of the private secondary market for concessions, and new sanctions for water-related violations.”

Annual report 2026A · The company itself

“The breweries each receive water originating from separate and distinct aquifers. We believe we have adequate access to water to support these breweries’ ongoing requirements, as well as future requirements after the completion of planned modular capacity addition activities at our breweries.”

Annual report 2026A · The company itself

“Supply of quality water, agricultural, and other raw materials, certain raw and packaging materials purchased under supply contracts; supply chain disruptions and other factors; limited group of certain suppliers The quality and quantity of water available for use is important to the supply of our agricultural raw materials and our ability to operate our business. Water is a limited resource in many parts of the world. If climate patterns change and droughts continue or become more severe or other restrictions on currently available water resources are imposed, there may be a scarcity of water or poor water quality which may affect our and our suppliers’ operations, increase production costs, or impose capacity constraints.”

Annual report 2026A · The company itself

“We are dependent on sufficient amounts of quality water for operation of our breweries, wineries, and distilleries, as well as to irrigate our vineyards and conduct our other operations. The suppliers of the agricultural raw materials we purchase are also dependent upon sufficient supplies of quality water for their vineyards and fields.”

Annual report 2026A · The company itself

“Meanwhile, escalating geopolitical events, tensions, and trade disputes, have resulted and may continue to result in additional sanctions, tariffs, import-export restrictions, boycotts, or trade wars.”

Annual report 2026A · The company itself

“The supply, on-time availability, and cost of raw, packaging, and other materials, energy, and other commodities have been and may continue to be affected by many factors beyond our control, including economic factors, legal and regulatory requirements, including tariffs and extended producer responsibility and post-consumer recycled content obligations, supply chain disruptions, inflationary pressures, market demand, geopolitical events and tensions, wars, military conflicts, including the conflict in the Middle East, weather events or natural or man-made disasters, including droughts, storms, and wildfires, plant diseases, and theft.”

Annual report 2026A · The company itself

“A prolonged closure or restriction of the border between the U.S. and Mexico, particularly at key product and supply crossing points, could result in temporary or longer-term disruptions of sales, consumption, and trade patterns, supply chains, production processes, and/or operations.”

Annual report 2026A · The company itself

“These factors 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.”

Annual report 2026A · The company itself

“Most of our annual grape requirements are satisfied by grower purchases from each year’s harvest. During Fiscal 2026, we received grapes from approximately 120 independent growers located in the U.S. and 25 independent growers located in New Zealand and Italy. We enter into purchase agreements with a majority of these growers with pricing that generally varies year-to-year and is largely based on then-current market prices.”

Annual report 2026A · The company itself

“This acreage supplied a large portion of the grapes used for the production of our wines.”

Annual report 2026A · The company itself

“The distilled spirits manufactured and imported by us require various agricultural products, neutral grain spirits, and bulk spirits, which we fulfill through purchases from various sources by contractual arrangement and through purchases on the open market.”

Annual report 2026A · The company itself

“Our breweries, the Glass Plant, our wineries, and our distilleries use a large volume of agricultural and other raw materials to produce our products. These include corn starch and sugars, malt, hops, fruits, yeast, and water for our breweries; soda ash and silica sand for the Glass Plant; grapes and water for our wineries; and grain and water for our distilleries.”

Annual report 2026A · The company itself

“We place focus on positioning our portfolio on higher-margin, higher-growth categories of the beverage alcohol industry to align with our strategy to address consumer-led premiumization, product, and purchasing trends, which we anticipate will continue to drive stronger growth rates relative to the industry.”

Annual report 2026A · The company itself

“Consumer preferences, behaviors, perception, and sentiment may shift due to a variety of factors, including changes in taste preferences and leisure, dining, and beverage purchasing and consumption patterns, U.S. demographic trends, changing market dynamics, including consumer-led premiumization, moderation, and betterment trends, pricing, perceived value, branding, marketing, and reputational considerations, geopolitical events and tensions, trends involving environmental sustainability and CSR matters, and other negative trends impacting our products, business, and the entire beverage alcohol industry, such as elevated product supply or inventory levels.”

Annual report 2026A · The company itself

“Many groups on a worldwide basis have experienced increases in electronic security breaches, cyberattacks, and other hacking activities such as phishing attacks, denial of service, malware, ransomware, and cyber extortion, and there is the possibility of retaliatory cyberattacks, including by state-sponsored organizations. As with all large IT systems, we have been a target of cyberattackers and other hacking activities and our systems could be penetrated by increasingly sophisticated external or internal threat actors (including through the use of existing and emerging technologies, such as AI) intent on extracting confidential or proprietary information, corrupting our information, disrupting our business processes, engaging in the unauthorized use of strategic information about us or our employees, Customers, or consumers, or demanding monetary payment.”

Annual report 2026A · The company itself

“Outbreaks of communicable infections or diseases, pandemics, or other widespread public health crises impacting our consumers, Customers, employees, and/or suppliers Communicable disease outbreaks, such as the COVID-19 pandemic, and other widespread public health crises have resulted and in the future could result in disruptions and damage to our business caused by potential negative consumer purchasing behavior and reduced consumption as well as disruption to our supply chains, production processes, and operations.”

Annual report 2026A · The company itself

“Our continued success also depends on our ability to attract and retain a high-quality workforce that reflects the consumers and communities we serve in a competitive environment for talent and to implement our human capital strategy, priorities, and initiatives. We could experience higher expenses to deliver on our human capital strategy, priorities, and initiatives, such as for investment in our personnel, including due to employee turnover, wage inflation, and/or other current or emerging employment trends, particularly in the U.S., to defend ourselves in investigations or against existing or new litigation, or for other reasons.”

Annual report 2026A · The company itself

“Operational disruptions or catastrophic loss to breweries, wineries, other facilities, or distribution systems All of our beer products are produced at our breweries. Many of the workers at these breweries are covered by collective bargaining agreements.”

Annual report 2026A · The company itself

“Employees of wholesalers or retailers of our products have engaged and may in the future engage in labor strikes, other work stoppages, or other labor activities.”

Annual report 2026A · The company itself

“Labor activities could increase our costs If our employees were to engage in a labor strike, other work stoppage, or other labor activities, we could experience an operational disruption, incur higher ongoing labor costs, and/or suffer reputational harm, which could have a material adverse effect on our business, liquidity, financial condition, and/or results of operations.”

Annual report 2026A · The company itself

“HUMAN CAPITAL RESOURCES As of February 28, 2026, we had approximately 9,400 employees, including approximately 1,100 employees through our equally-owned joint venture with Owens-Illinois.”

Annual report 2026A · The company itself

“We may be impacted by increases in global energy prices or reduced supply, particularly for crude oil and natural gas, including as a result of geopolitical events and tensions, wars, and military conflicts, including the conflict in the Middle East.”

Annual report 2026A · The company itself

“Our production facilities also use electricity, natural gas, and diesel fuel in addition to renewable energy sources in their operations.”

Annual report 2026A · The company itself

“The increased cost of product sold is primarily due to (i) $58.3 million in tariffs, largely on aluminum imports under Section 232, (ii) $58.2 million of unfavorable fixed cost absorption related to decreased production levels as compared to Fiscal 2025, and (iii) a $14.6 million increase in brewery costs, including maintenance and utilities.”

Annual report 2026A · The company itself

“The countries in which we operate impose duties, excise taxes, and other taxes on beverage alcohol products, and on certain raw materials used to produce our beverage alcohol products, in varying amounts.”

Annual report 2026A · The company itself

“There has also been public attention directed at the beverage alcohol industry, which we believe is due to concerns related to harmful use of alcohol, including drinking and driving, underage drinking, and health consequences from the misuse of alcohol.”

Annual report 2026A · The company itself

“Meanwhile, the recent proliferation and rapid evolution of AI technologies, including generative AI, machine learning, and agentic AI, has resulted in new challenges, including business, legal and regulatory, and ethical considerations and uncertainty. For example, the use of AI technologies without adequate safeguards could produce flawed or inaccurate recommendations, suggestions, or outcomes or other unintended results or potential vulnerabilities or expose us to liability or adverse legal or regulatory consequences.”

Annual report 2026A · The company itself

“We expect that our continued success will depend, in part, on our and our third-party service providers’ ability to continue to effectively leverage existing and emerging technologies, such as AI and data analytics, to gain relevant insights and enhance our business.”

Annual report 2026A · The company itself

“Our production facilities also use electricity, natural gas, and diesel fuel in addition to renewable energy sources in their operations.”

Annual report 2026A · The company itself

“The increased cost of product sold is primarily due to (i) $58.3 million in tariffs, largely on aluminum imports under Section 232, (ii) $58.2 million of unfavorable fixed cost absorption related to decreased production levels as compared to Fiscal 2025, and (iii) a $14.6 million increase in brewery costs, including maintenance and utilities.”

Annual report 2026A · The company itself

“Various stakeholders have expressed widely divergent views on environmental sustainability, social, human capital, and governance-related matters, among others, and we are faced with conflicting expectations and regulations regarding such matters which has inhibited and may continue to inhibit our ability to achieve a consistently positive perception across our entire stakeholder base.”

Annual report 2026A · The company itself

“The landscape related to environmental sustainability and CSR-related regulation, compliance, and reporting is constantly evolving, including changing in scope and complexity. For example, the European Commission and the SEC have promulgated rules that would require significantly increased disclosures related to climate change, although each body has taken subsequent actions to limit or abandon their rules.”

Annual report 2026A · The company itself

“Reliance upon complex information systems and third-party global networks; cybersecurity; AI We depend on IT to enable us to operate efficiently and interface with Customers, suppliers, and consumers, maintain financial accuracy and efficiency, and effect accurate and timely governmental reporting, among other activities. If we do not allocate and effectively manage the resources to build and sustain appropriate technology infrastructure, including our global enterprise resource planning system and our unified finance platform, we could be subject to transaction or data integrity errors, processing inefficiencies, increased costs, loss of Customers, business disruptions, loss of or damage to intellectual property or proprietary information, including through a security breach, penalties associated with the failure to timely file governmental reports, and/or other difficulties.”

Annual report 2026A · The company itself

“We have outsourced various functions to third-party service providers, including cloud-based technology providers, and may outsource other functions in the future. We rely on such third-parties to provide services on a timely and effective basis, but we do not ultimately control their performance.”

Annual report 2026A · The company itself

“During Fiscal 2026, we spent more than $700 million on modular capacity addition activities which continue at our breweries to support expected future business needs. In Fiscal 2027, we expect to spend approximately $800 million for capital expenditures almost entirely focused on these activities.”

Annual report 2026A · The company itself

“These factors 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.”

Annual report 2026A · The company itself

“We may experience significant future increases in the costs associated with environmental sustainability and CSR-related matters, including fees, licenses, personnel, consultants, reporting, and the cost of capital improvements for our operating facilities to meet environmental regulatory requirements, to address other regulations, standards, frameworks, ratings, and activities from various governmental entities and other stakeholders, in our ongoing handling of investor, activist, or influencer activities and campaigns, and/or in the event of investigations or litigation related to such matters.”

Annual report 2026A · The company itself

“Our production facilities also use electricity, natural gas, and diesel fuel in addition to renewable energy sources in their operations.”

Annual report 2026A · The company itself

“Our insurance policies do not cover certain types of catastrophes and may not cover certain events such as pandemics. Economic conditions and uncertainties in global markets may adversely affect the cost and other terms upon which we are able to obtain insurance coverage, including for property damage and business interruption.”

Annual report 2026A · The company itself

“We may be impacted by increases in global energy prices or reduced supply, particularly for crude oil and natural gas, including as a result of geopolitical events and tensions, wars, and military conflicts, including the conflict in the Middle East.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“BUSINESS INTRODUCTION We are an international producer and marketer of beer, wine, and spirits with operations in the U.S., Mexico, New Zealand, and Italy with powerful, consumer-connected, high-quality brands like Modelo Especial, Corona Extra, Pacifico, Victoria, Kim Crawford, Ruffino, The Prisoner Wine Company, Robert Mondavi Winery, Mi CAMPO, and High West.”

Annual report 2026A · The company itself

“Our wine portfolio is supported by grapes purchased from independent growers, primarily in the U.S. and New Zealand, and vineyard holdings in the U.S., New Zealand, and Italy. Our wine and spirits are primarily marketed in the U.S. and also sold in Australia, Canada, Italy, New Zealand, and other major world markets.”

Annual report 2026A · The company itself

“In the U.S., we currently operate nine wineries using many varieties of grapes grown principally in the Napa, Sonoma, and Central Coast regions of California as well as the Willamette Valley region of Oregon. We also operate two wineries in New Zealand and six wineries in Italy.”

Annual report 2026A · The company itself

“As of February 28, 2026, our principal physical properties by segment, all of which are owned unless otherwise noted, consist of: Beer Wine and Spirits Breweries •Nava Brewery in Nava •Obregón Brewery in Obregón •Veracruz Brewery in Veracruz (1) Warehouse, distribution, and other production facilities •Glass Plant in Nava •Warehouse in Arlington, Texas (2) •Warehouse in Hutchins, Texas (2) •Warehouse in Jacksonville, Florida (2) •Warehouse in Jurupa Valley, California (2) Wineries •Kim Crawford Winery in Marlborough, New Zealand •The Prisoner Wine Company in St. Helena, California •Robert Mondavi Winery in Oakville, California Warehouse, distribution, and other production facilities •Lodi Distribution Center in Lodi, California •Pontassieve Winery in Florence, Italy (1)Initial production is expected to commence around the middle of Fiscal 2027.”

Annual report 2026A · The company itself

“Within our Wine and Spirits segment, as of February 28, 2026, we owned, leased, or had interests in approximately 6,300 acres of vineyards in New Zealand, 2,300 acres of vineyards in the U.S., and 1,400 acres of vineyards in Italy.”

Annual report 2026A · The company itself

“Our wine and spirits are primarily marketed in the U.S. and also sold in Australia, Canada, Italy, New Zealand, and other major world markets.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“Within our Wine and Spirits segment, as of February 28, 2026, we owned, leased, or had interests in approximately 6,300 acres of vineyards in New Zealand, 2,300 acres of vineyards in the U.S., and 1,400 acres of vineyards in Italy.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“As of February 28, 2026, our principal physical properties by segment, all of which are owned unless otherwise noted, consist of: Beer Wine and Spirits Breweries •Nava Brewery in Nava •Obregón Brewery in Obregón •Veracruz Brewery in Veracruz (1) Warehouse, distribution, and other production facilities •Glass Plant in Nava •Warehouse in Arlington, Texas (2) •Warehouse in Hutchins, Texas (2) •Warehouse in Jacksonville, Florida (2) •Warehouse in Jurupa Valley, California (2) Wineries •Kim Crawford Winery in Marlborough, New Zealand •The Prisoner Wine Company in St. Helena, California •Robert Mondavi Winery in Oakville, California Warehouse, distribution, and other production facilities •Lodi Distribution Center in Lodi, California •Pontassieve Winery in Florence, Italy (1)Initial production is expected to commence around the middle of Fiscal 2027.”

Annual report 2026A · The company itself

“As of February 28, 2026, our principal physical properties by segment, all of which are owned unless otherwise noted, consist of: Beer Wine and Spirits Breweries •Nava Brewery in Nava •Obregón Brewery in Obregón •Veracruz Brewery in Veracruz (1) Warehouse, distribution, and other production facilities •Glass Plant in Nava •Warehouse in Arlington, Texas (2) •Warehouse in Hutchins, Texas (2) •Warehouse in Jacksonville, Florida (2) •Warehouse in Jurupa Valley, California (2) Wineries •Kim Crawford Winery in Marlborough, New Zealand •The Prisoner Wine Company in St. Helena, California •Robert Mondavi Winery in Oakville, California Warehouse, distribution, and other production facilities •Lodi Distribution Center in Lodi, California •Pontassieve Winery in Florence, Italy (1)Initial production is expected to commence around the middle of Fiscal 2027.”

Annual report 2026A · The company itself