Operating loss carryforwards subject to expire by fiscal 2027



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

Significant components of deferred tax assets (liabilities) consist of the following:

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|  | February 28,2022 |  | February 28,2021 |
| (in millions) |  |  |  |
| Deferred tax assets |  |  |  |
| Intangible assets | $ | 2,188.8  |  |  | $ | 1,852.0  |  |
| Loss carryforwards | 349.8  |  |  | 233.1  |  |
| Stock-based compensation | 22.9  |  |  | 30.1  |  |
| Lease liabilities | 69.0  |  |  | 83.1  |  |
| Inventory | 51.8  |  |  | 26.6  |  |
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| Investments in unconsolidated investees | 541.0  |  |  | 36.7  |  |
| Other accruals | 67.8  |  |  | 33.7  |  |
| Gross deferred tax assets | 3,291.1  |  |  | 2,295.3  |  |
| Valuation allowances | (552.1) |  |  | (78.6) |  |
| Deferred tax assets, net | 2,739.0  |  |  | 2,216.7  |  |
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| Deferred tax liabilities |  |  |  |
| Intangible assets | (522.1) |  |  | —  |  |
| Property, plant, and equipment | (186.0) |  |  | (200.3) |  |
| Investments in unconsolidated investees | (58.9) |  |  | —  |  |
| Provision for unremitted earnings | (26.0) |  |  | (23.0) |  |
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| Right-of-use assets | (59.8) |  |  | (70.6) |  |
| Other accruals | (50.5) |  |  | —  |  |
| Total deferred tax liabilities | (903.3) |  |  | (293.9) |  |
| Deferred tax assets (liabilities), net | $ | 1,835.7  |  |  | $ | 1,922.8  |  |

  
In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the projected reversal of deferred tax liabilities and projected future taxable income as well as tax planning strategies. Based upon this assessment, we believe it is more likely than not that we will realize the benefits of these deductible differences, net of any valuation allowances.  
As of February 28, 2022, operating loss carryforwards, which are primarily state and foreign, totaling $3.2 billion are being carried forward in a number of jurisdictions where we are permitted to use tax operating losses from prior periods to reduce future taxable income. Of these operating loss carryforwards, $1.8 billion will expire by fiscal 2029, $900.0 million will expire between fiscal 2030 and fiscal 2042, and $500.0 million may be carried forward indefinitely in certain jurisdictions.  
We have recognized valuation allowances for operating loss carryforwards and other deferred tax assets when we believe it is more likely than not that these items will not be realized. The increase in our valuation allowances as of February 28, 2022, primarily related to the unrealized net gain (loss) from changes in fair value of our investment in Canopy and Canopy equity in earnings (losses).

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| Constellation Brands, Inc. FY 2022 Form 10-K | #WORTHREACHINGFOR    I    98 |


