The company is focusing on upholding its leadership position in the U.S. beer market and continuing to grow its high-end imported beer brands. Within wine and spirits, they have implemented a strategy to reposition this business to a portfolio of exclusively higher-end brands, including through the 2025 Wine Divestitures Transaction.

During Fiscal 2025, the company spent nearly $940 million on planned expansions and execution of optimization initiatives and ongoing construction of the Veracruz Brewery. The company expects to spend approximately $2 billion over Fiscal 2026 through Fiscal 2028 largely on such activities.

The company is advancing its aim to become a global, omni-channel competitor in line with evolving consumer preferences as it continues its efforts to progressively expand into DTC channels (including hospitality), 3-tier eCommerce, and international markets.

The company has implemented the 2025 Restructuring Initiative which is expected to yield over $200 million in net annualized cost savings by Fiscal 2028. The majority of the work associated with the 2025 Restructuring Initiative is expected to be completed within Fiscal 2026.

Work-related injuries resulting from the production of our beer, wine, and spirits products are well below industry average. The recordable incident rate is defined as total number of worldwide CBI work-related injuries (cases beyond first aid) per 100 full-time employees.

The company relies upon both internal and external resources for evaluating and enhancing our cyber posture. At least annually, our information security and internal audit teams conduct extensive internal and external penetration testing, supplemented by more frequent Purple-team Tests that are designed to identify critical areas of our technical environment and potential vulnerabilities that may need to be addressed.

The company's business depends upon consumers' consumption of its beer, wine, and spirits brands, and sales of its Mexican beer brands in the U.S. represent the vast majority of its business. A limited or general decline in consumption in one or more of our product categories has occurred before and could occur again in the future due to a variety of factors.

The quality and quantity of water available for use is important to the supply of our agricultural raw materials and our ability to operate our business. Water is a limited resource in many parts of the world. If climate patterns change and droughts continue or become more severe or other restrictions on currently available water resources are imposed, there may be a scarcity of water or poor water quality which may affect our and our suppliers' operations, increase production costs, or impose capacity constraints.

The company depends on IT to enable it to operate efficiently and interface with customers, suppliers, and consumers, maintain financial accuracy and efficiency, and effect accurate and timely governmental reporting, among other activities. The swift pace of technological change has led to a nonuniform and complex set of cybersecurity and data privacy laws, regulations, and standards. Meanwhile, the recent proliferation and rapid evolution of AI has resulted in new challenges.

The beverage alcohol industry is highly competitive. We compete on the basis of quality, price, brand recognition and reputation, and distribution strength. Our beverage alcohol products compete with other alcoholic and non-alcoholic beverages for consumer purchases, as well as shelf space in retail stores, restaurant presence, and wholesaler attention.

Notable achievements in the U.S. include the following: (i) we had 5 of the top 15 share gaining brands across the total beer category, (ii) Modelo Especial was the best-selling beer overall, (iii) Corona Extra was the second largest imported beer and fifth best-selling beer overall, and (iv) Pacifico and Victoria were the top two fastest growing major imported beer brands.

The company is advancing its aim to become a global, omni-channel competitor in line with evolving consumer preferences as it continues its efforts to progressively expand into international markets, DTC channels (including hospitality), and 3-tier eCommerce.

The majority of the work associated with the 2025 Restructuring Initiative is expected to be completed within Fiscal 2026 and is estimated to result in $80 million to $100 million of cumulative pre-tax costs once all phases are fully implemented.

To partially offset the expected increases in cost of product sold we executed initiatives focused largely on logistics and procurement that resulted in over $200 million of cost savings for Fiscal 2025.

For our Mexican beer brands, packaging materials are the largest cost component of production, with glass bottles representing the largest cost component of our packaging materials. We aim to reduce operational waste and enhance our use of returnable, recyclable, or renewable packaging.

We are also building on the success of our leading import brand families through our innovation strategy. For example, our Modelo Chelada brands have become an important contributor to our portfolio as the leading chelada in the U.S. beer market.

We intend for our multi-year Digital Business Acceleration initiative to enable us to drive results by enhancing our technology capabilities in key areas. In Fiscal 2025, we focused on end-to-end digital supply chain planning, logistics, procurement, and revenue growth management.

As with all large IT systems, we have been a target of cyberattackers and other hacking activities, as have certain of our third-party service providers.

Expansion, optimization, and/or construction activities continue under our Mexico Beer Projects to align with our anticipated future growth expectations, and we expect to spend approximately $2 billion over Fiscal 2026 through Fiscal 2028 largely on these activities.

In April 2025, the Board of Directors authorized the repurchase of up to $4.0 billion of our publicly traded common stock under the 2025 Authorization. The 2025 Authorization replaced the 2023 Authorization in its entirety and no further repurchases will be made pursuant to the 2023 Authorization.

We currently expect to return $4.0 billion in share repurchases to stockholders over the next three fiscal years, but such repurchases are dependent upon our financial condition, results of operations, capital requirements, and other factors, including those set forth under Item 1A. “Risk Factors” of this Form 10-K.

As part of our brewery expansion efforts and commitment to making a positive impact on the communities where we operate, we plan to continue working with local authorities and community-based organizations on sustainability initiatives that benefit local residents.

We are subject to a range of laws and regulations in the countries in which we operate. Where we produce products, we are subject to environmental laws and regulations, and may be required to obtain environmental and alcohol beverage permits and licenses to operate our facilities.

To achieve our mission of building brands that people love, we believe it is essential to cultivate a workforce that reflects the consumers and communities we serve. We also believe that building an inclusive culture where all employees can come together and develop strong relationships rooted in mutual understanding, respect, and trust is important to developing a high-performing team, winning with an evolving consumer base, and achieving our strategic ambitions.

Our results of operations and financial condition have been affected by an evolving consumer demand environment largely driven by what we believe to be non-structural socioeconomic factors. These factors include subdued spend, value-seeking behaviors, and reductions in the discretionary income available to purchase our products among consumers, elevated unemployment, changing prices, inflation, other unfavorable global and regional economic conditions, demographic trends in the U.S., global supply chain disruptions and constraints, and geopolitical events, as well as retailer destocking impacting our Wine and Spirits segment.

Recent developments in international trade relations, including significant changes in U.S. trade policy and actions which include threatened, new, and increased tariffs on other countries and retaliatory tariffs and actions imposed on certain U.S. goods have produced heightened uncertainty with respect to trade and tariff policies and regulations affecting trade between the U.S. and other countries, which could continue to alter the global trade environment.

We are subject to a range of laws and regulations in the countries in which we operate. Where we produce products, we are subject to environmental laws and regulations, and may be required to obtain environmental and alcohol beverage permits and licenses to operate our facilities.