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

Annual report pursuant to Section 13 and 15(d)

Property, Plant, and Equipment

Property, Plant, and Equipment

12 Months Ended

Feb. 28, 2023

Property, Plant and Equipment [Abstract]

The major components of property, plant, and equipment are as follows:


	February 28, 2023 (1) (2)		February 28, 2022 (3)
(in millions)
Land and land improvements	$	477.2	$	456.2
Vineyards	243.5		255.3
Buildings and improvements	1,800.4		1,109.4
Machinery and equipment	5,277.9		4,827.8
Motor vehicles	186.1		140.0
Construction in progress (4)	1,272.0		1,223.2
	9,257.1		8,011.9
Less – Accumulated depreciation	(2,391.9)		(1,952.3)
	$	6,865.2	$	6,059.6

(1)The property, plant, and equipment balance excludes Mexicali Brewery amounts reclassified to assets held for sale. See “Mexicali Brewery” below for further discussion.

(2)The property, plant, and equipment balance is net of an impairment of long-lived assets, including the Daleville Facility, of $51.6 million. See “Daleville Facility” below and Note 7 for further discussion.

(3)The property, plant, and equipment balance is net of an impairment of brewery construction in progress of $665.9 million. See Note 7 for further discussion.

(4)Interest costs incurred during the expansion, optimization, and construction of facilities are capitalized to construction in progress. We capitalized interest costs of $36.5 million, $25.3 million, and $31.5 million for the years ended February 28, 2023, February 28, 2022, and February 28, 2021, respectively, primarily due to the Mexico Beer Projects.

Mexicali Brewery

As of February 28, 2023, we determined the remaining Mexicali Brewery net assets have met held for sale criteria. The carrying value of assets held for sale are included in prepaid expenses and other and other assets within our consolidated balance sheet and we have concluded that no additional impairment existed. We are pursuing the sale of the remaining net assets at the Mexicali Brewery after exploring various options; however, we may not be successful in completing any such sale or obtaining other forms of recovery.

Lodi Distribution Center

In December 2021, we purchased a previously leased wine and spirits distribution facility located in Lodi, California.

Subsequent event

Daleville Facility

In March 2023, we entered into a definitive agreement to sell the Daleville Facility. We expect the transaction to close during the three months ending May 31, 2023, subject to required regulatory approvals and customary closing conditions. The net cash proceeds from the transaction are expected to be used primarily for general corporate purposes, including retirement of debt.