Annual report pursuant to Section 13 and 15(d)

Leases

v3.22.1
Leases
 12 Months Ended
Feb. 28, 2022
Leases [Abstract]  
LEASES, OPERATING LEASES
General
We primarily lease certain vineyards, office and production facilities, warehouses, production equipment, and vehicles. We have concluded that certain grape purchasing arrangements associated with the purchase of grape production yielded from a specified block of a vineyard and certain third-party logistics arrangements contain a lease.

Balance sheet location
A summary of lease right-of-use assets and liabilities are as follows:
Balance Sheet Classification February 28,
2022		 February 28,
2021
(in millions)
Assets
Operating lease Other assets $ 478.9  $ 477.9 
Finance lease Property, plant, and equipment 21.8  17.0 
Total right-of-use assets $ 500.7  $ 494.9 
Liabilities
Current:
Operating lease Other accrued expenses and liabilities $ 80.4  $ 68.8 
Finance lease Current maturities of long-term debt 6.3  4.6 
Non-current:
Operating lease Deferred income taxes and other liabilities 457.3  471.1 
Finance lease Long-term debt, less current maturities 13.6  10.9 
Total lease liabilities $ 557.6  $ 555.4 

Lease cost
The components of total lease cost are as follows:
For the Years Ended

February 28,
2022		 February 28,
2021		 February 29,
2020
(in millions)
Operating lease cost $ 89.5  $ 93.4  $ 98.9 
Finance lease cost:
Amortization of right-of-use assets 5.8  11.0  12.2 
Interest on lease liabilities 0.5  0.5  0.7 
Short-term lease cost 8.4  9.2  8.6 
Variable lease cost (1)
202.5  216.5  403.3 
Total lease cost $ 306.7  $ 330.6  $ 523.7 
(1)Higher variable lease costs for the year ended February 29, 2020, was primarily driven by the transfer of grape purchasing agreements in connection with our Wine and Spirits Divestitures.
Lease maturities
As of February 28, 2022, minimum payments due for lease liabilities for each of the five succeeding fiscal years and thereafter are as follows:
Operating Leases Finance Leases
(in millions)
Fiscal 2023 $ 95.1  $ 7.3 
Fiscal 2024 89.1  6.6 
Fiscal 2025 73.3  4.2 
Fiscal 2026 50.5  2.1 
Fiscal 2027 43.0  0.9 
Thereafter 290.6  0.1 
Total lease payments 641.6  21.2 
Less: Interest (103.9) (1.3)
Total lease liabilities $ 537.7  $ 19.9 

Related party transaction
We have entered into a lease for office space with an affiliate of an executive officer and director that has not yet commenced. As of February 28, 2022, the aggregate minimum payments for this operating lease totaled $38.4 million on an undiscounted basis.

Supplemental information

 For the Years Ended
February 28,
2022		 February 28,
2021		 February 29,
2020
(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 92.7  $ 93.9  $ 100.7 
Operating cash flows from finance leases $ 0.5  $ 0.5  $ 0.7 
Financing cash flows from finance leases $ 5.9  $ 10.5  $ 13.8 
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases $ 93.8  $ 66.3  $ 34.3 
Finance leases $ 10.5  $ 11.6  $ 10.7 
February 28,
2022		 February 28,
2021		 February 29,
2020
Weighted-average remaining lease term: (1)
Operating leases 12.1 years 12.8 years 11.7 years
Finance leases 3.3 years 2.9 years 3.2 years
Weighted-average discount rate:
Operating leases 3.0  % 3.2  % 3.5  %
Finance leases 3.4  % 1.2  % 2.6  %
(1)Our leases have varying terms with remaining lease terms of up to approximately 30 years. Certain of our lease arrangements provide us with the option to extend or to terminate the lease early.
LEASES, FINANCE LEASES
General
We primarily lease certain vineyards, office and production facilities, warehouses, production equipment, and vehicles. We have concluded that certain grape purchasing arrangements associated with the purchase of grape production yielded from a specified block of a vineyard and certain third-party logistics arrangements contain a lease.

Balance sheet location
A summary of lease right-of-use assets and liabilities are as follows:
Balance Sheet Classification February 28,
2022		 February 28,
2021
(in millions)
Assets
Operating lease Other assets $ 478.9  $ 477.9 
Finance lease Property, plant, and equipment 21.8  17.0 
Total right-of-use assets $ 500.7  $ 494.9 
Liabilities
Current:
Operating lease Other accrued expenses and liabilities $ 80.4  $ 68.8 
Finance lease Current maturities of long-term debt 6.3  4.6 
Non-current:
Operating lease Deferred income taxes and other liabilities 457.3  471.1 
Finance lease Long-term debt, less current maturities 13.6  10.9 
Total lease liabilities $ 557.6  $ 555.4 

Lease cost
The components of total lease cost are as follows:
For the Years Ended

February 28,
2022		 February 28,
2021		 February 29,
2020
(in millions)
Operating lease cost $ 89.5  $ 93.4  $ 98.9 
Finance lease cost:
Amortization of right-of-use assets 5.8  11.0  12.2 
Interest on lease liabilities 0.5  0.5  0.7 
Short-term lease cost 8.4  9.2  8.6 
Variable lease cost (1)
202.5  216.5  403.3 
Total lease cost $ 306.7  $ 330.6  $ 523.7 
(1)Higher variable lease costs for the year ended February 29, 2020, was primarily driven by the transfer of grape purchasing agreements in connection with our Wine and Spirits Divestitures.
Lease maturities
As of February 28, 2022, minimum payments due for lease liabilities for each of the five succeeding fiscal years and thereafter are as follows:
Operating Leases Finance Leases
(in millions)
Fiscal 2023 $ 95.1  $ 7.3 
Fiscal 2024 89.1  6.6 
Fiscal 2025 73.3  4.2 
Fiscal 2026 50.5  2.1 
Fiscal 2027 43.0  0.9 
Thereafter 290.6  0.1 
Total lease payments 641.6  21.2 
Less: Interest (103.9) (1.3)
Total lease liabilities $ 537.7  $ 19.9 

Related party transaction
We have entered into a lease for office space with an affiliate of an executive officer and director that has not yet commenced. As of February 28, 2022, the aggregate minimum payments for this operating lease totaled $38.4 million on an undiscounted basis.

Supplemental information

 For the Years Ended
February 28,
2022		 February 28,
2021		 February 29,
2020
(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 92.7  $ 93.9  $ 100.7 
Operating cash flows from finance leases $ 0.5  $ 0.5  $ 0.7 
Financing cash flows from finance leases $ 5.9  $ 10.5  $ 13.8 
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases $ 93.8  $ 66.3  $ 34.3 
Finance leases $ 10.5  $ 11.6  $ 10.7 
February 28,
2022		 February 28,
2021		 February 29,
2020
Weighted-average remaining lease term: (1)
Operating leases 12.1 years 12.8 years 11.7 years
Finance leases 3.3 years 2.9 years 3.2 years
Weighted-average discount rate:
Operating leases 3.0  % 3.2  % 3.5  %
Finance leases 3.4  % 1.2  % 2.6  %
(1)Our leases have varying terms with remaining lease terms of up to approximately 30 years. Certain of our lease arrangements provide us with the option to extend or to terminate the lease early.