Net flow through of reserved inventory



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| PART II | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | Table of Contents |

  
22.    BUSINESS SEGMENT INFORMATION  
Our internal management financial reporting consists of three business divisions: (i) Beer, (ii) Wine and Spirits, and (iii) Canopy and we report our operating results in four segments: (i) Beer, (ii) Wine and Spirits, (iii) Corporate Operations and Other, and (iv) Canopy. The Canopy Equity Method Investment makes up the Canopy segment.  
In the Beer segment, our portfolio consists of high-end imported beer brands, craft beer, and ABAs. We have an exclusive perpetual brand license to import, market, and sell our Mexican beer portfolio in the U.S. In the Wine and Spirits segment, we sell a portfolio that includes higher-margin, higher-growth wine brands complemented by certain higher-end spirits brands. Amounts included in the Corporate Operations and Other segment consist of costs of executive management, corporate development, corporate finance, corporate growth and strategy, human resources, internal audit, investor relations, legal, public relations, and information technology, as well as our 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. 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.  
In addition, management excludes Comparable Adjustments 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.  
We evaluate segment operating performance based on operating income (loss) of the respective business units. Comparable Adjustments that impacted comparability in our segment operating income (loss) for each period are as follows:

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|  | For the Years Ended |
|  | February 28,2022 |  | February 28,2021 |  | February 29,2020 |
| (in millions) |  |  |  |  |  |
| Cost of product sold |  |  |  |  |  |
| Net gain (loss) on undesignated commodity derivative contracts | $ | 109.9  |  |  | $ | 25.1  |  |  | $ | (49.0) |  |
| Net flow through of reserved inventory | 12.1  |  |  | —  |  |  | —  |  |
| Settlements of undesignated commodity derivative contracts | (35.9) |  |  | 31.6  |  |  | 11.7  |  |
| Strategic business development costs | (2.6) |  |  | (29.8) |  |  | (124.5) |  |
| Recovery of (loss on) inventory write-down | (1.0) |  |  | (70.4) |  |  | 8.6  |  |
| Flow through of inventory step-up | (0.1) |  |  | (0.4) |  |  | (1.5) |  |
| COVID-19 incremental costs | —  |  |  | (7.6) |  |  | —  |  |
| Accelerated depreciation | —  |  |  | (0.1) |  |  | (7.6) |  |
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| Total cost of product sold | 82.4  |  |  | (51.6) |  |  | (162.3) |  |
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| Constellation Brands, Inc. FY 2022 Form 10-K | #WORTHREACHINGFOR    I    112 |


