Constellation Brands, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)

12 Months Ended

Feb. 28, 2023

Number of shares of common stock issued and treasury stock, and associated share activity

The number of shares of common stock issued and treasury stock, and associated share activity, are as follows:


	Common Stock			Treasury Stock
	Class A	Class B	Class 1	Class A	Class B
Balance at February 29, 2020	186,090,745	28,300,206	1,692,227	18,256,826	5,005,800


Conversion of shares	1,113,535	(29,918)	(1,083,617)	—	—
Exercise of stock options	—	—	4,326	(1,020,853)	—
Employee stock purchases	—	—	—	(67,801)	—

Vesting of restricted stock units (1)	—	—	—	(80,287)	—
Vesting of performance share units (1)	—	—	—	(17,335)	—

Balance at February 28, 2021	187,204,280	28,270,288	612,936	17,070,550	5,005,800

Share repurchases	—	—	—	6,179,015	—
Conversion of shares	59,579	(57,948)	(1,631)	—	—
Exercise of stock options	—	—	1,637,374	(287,873)	—
Employee stock purchases	—	—	—	(57,738)	—

Vesting of restricted stock units (1)	—	—	—	(71,413)	—
Vesting of performance share units (1)	—	—	—	(7,934)	—
Balance at February 28, 2022	187,263,859	28,212,340	2,248,679	22,824,607	5,005,800

Share repurchases	—	—	—	7,086,446	—
Retirement of shares (2)	—	(5,005,800)	—	—	(5,005,800)
Conversion of shares (3)	25,433,569	(23,206,540)	(2,227,029)	—	—
Exercise of stock options	—	—	1,055	(262,970)	—
Employee stock purchases	—	—	—	(57,284)	—

Vesting of restricted stock units (1)	—	—	—	(76,047)	—
Vesting of performance share units (1)	—	—	—	(16,326)	—

Balance at February 28, 2023	212,697,428	—	22,705	29,498,426	—

(1)Net of the following shares withheld to satisfy tax withholding requirements:


	For the Years Ended
	February 28, 2023	February 28, 2022	February 28, 2021
Restricted Stock Units	37,494	36,213	37,933
Performance Share Units	4,919	4,565	9,433

(2)Shares of our Class B Treasury Stock were retired to authorized and unissued shares of our Class B Stock prior to completing the Reclassification.

(3)Includes shares of Class B Stock issued and outstanding immediately prior to the Effective Time that were reclassified, exchanged, and converted into one share of Class A Stock and the right to receive $64.64 in cash, without interest (see “Reclassification” below).

Summary of share repurchase activity

A summary of share repurchase activity is as follows:


			Class A Common Shares Repurchased
		For the Years Ended
	February 28, 2023				February 28, 2022				February 28, 2021
			Dollar Value			Number of Shares	Dollar Value			Number of Shares	Dollar Value		Number of Shares
(in millions, except share data)
2018 Authorization			$	563.6		2,254,536	$	1,390.5		6,179,015	$	—	—
2021 Authorization (1)			1,136.6			4,831,910	—			—	—		—
			$	1,700.2		7,086,446	$	1,390.5		6,179,015	$	—	—

(1)As of February 28, 2023, $863.4 million remains available for future share repurchases, excluding the impact of Federal excise tax owed pursuant to the IRA.

Reclassification

In November 2022, we completed the Reclassification at the Effective Time as contemplated by the Reclassification Agreement. Pursuant to the Reclassification, each share of Class B Stock issued and outstanding immediately prior to the Effective Time was reclassified, exchanged, and converted into one share of Class A Stock and the right to receive $64.64 in cash, without interest. The aggregate cash payment to holders of Class B Stock at the Effective Time was $1.5 billion. We utilized our $1.0 billion delayed draw three-year term loan facility under the August 2022 Term Credit Agreement and borrowings under our commercial paper program to fund the aggregate cash payment to holders of Class B Stock. The issuance of Class A Stock in connection with the Reclassification was registered under the Securities Act pursuant to the Registration Statement on Form S-4.

Following the completion of the Reclassification, a number of corporate governance changes were implemented, consisting of the following:

•Robert and Richard Sands, who previously served as our Executive Chairman of the Board and Executive Vice Chairman of the Board, respectively, retired from their executive positions;

•Robert Sands became our Non-Executive Chairman of the Board and Richard Sands continues serving as a non-executive Board member;

•the Sands Family Stockholders initially have the right to nominate two members to our Board of Directors for the next five years so long as they own 10% or more of the issued and outstanding shares of Class A Stock and to nominate one member to our Board of Directors for the next five years and beyond so long as they own 5% or more of the issued and outstanding shares of Class A Stock;

•holders of Class A Stock are entitled to elect all directors to be elected at future Annual Meetings of Stockholders; and

•certain standstill and lock-up provisions for the Sands Family Stockholders; limitations on the Sands Family Stockholders’, directors’, and officers’ ability to pledge our common stock; a near-term rotation of the lead independent director position; and the transition to a majority vote standard for uncontested director elections.