Operating loss carryforwards totaling $47.7 million at February 29, 2004, are being carried forward in a number of U.S. and foreign jurisdictions where the Company is permitted to use tax operating losses from prior periods to reduce future taxable income. Of these operating loss carryforwards, $6.6 million will expire in 2019 and $41.1 million may be carried forward indefinitely. In addition, certain tax credits generated of $8.6 million are available to offset future income taxes. These credits will expire, if not utilized, in 2007 through 2009. The Company is subject to ongoing tax examinations and assessments in various jurisdictions. Accordingly, the Company pro- vides for additional tax expense based on probable outcomes of such matters. The Internal Revenue Service is currently examin- ing tax returns for the years ended February 29, 2000, February 28, 2001, February 28, 2002, and February 28, 2003. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes the reserves reflect the probable outcome of known tax contingencies. Unfavorable settlement of any particular issue would require use of cash. Favorable resolution would be recognized as a reduction to the effective tax rate in the year of resolution. A reconciliation of the total tax provision to the amount computed by applying the statutory U.S. Federal income tax rate to income before provision for income taxes is as follows: The effect of earnings of foreign subsidiaries includes the difference between the U.S. statutory rate and local jurisdiction tax rates, as well as the provision for incremental U.S. taxes on unremitted earnings of foreign subsidiaries offset by foreign tax credits and other foreign adjustments. The Company’s retirement and profit sharing plan, the Constellation Brands, Inc. 401(k) and Profit Sharing Plan (the “Plan”), covers substantially all U.S. employees, excluding those employees covered by collective bargaining agreements. The 401(k) por- tion of the Plan permits eligible employees to defer a portion of their compensation (as defined in the Plan) on a pretax basis. Participants may defer up to 50% of their compensation for the year, subject to limitations of the Plan. The Company makes a matching contribution of 50% of the first 6% of compensation a participant defers. The amount of the Company’s contribution under the profit sharing portion of the Plan is a discretionary amount as determined by the Board of Directors on an annual basis, subject to limitations of the Plan. Company contributions under the Plan were $10.8 million, $10.9 million, and $10.5 million for the years ended February 29, 2004, February 28, 2003, and February 28, 2002, respectively. During the year ended February 29, 2004, in connection with the Hardy Acquisition, the Company acquired the BRL Hardy Superannuation Fund (now known as the Hardy Wine Company Superannuation Plan) (the “Hardy Plan”) which covers substan- tially all salaried Australian employees. The Hardy Plan has a defined benefit component and a defined contribution component. The Company also has a statutory obligation to provide a minimum defined contribution on behalf of any Australian employees who are not covered by the Hardy Plan. Additionally in Fiscal 2004, the Company instituted a defined contribution plan that covers sub- stantially all of its U.K. employees. Company contributions under the defined contribution component of the Hardy Plan, the Australian statutory obligation, and the U.K. defined contribution plan aggregated $6.5 million for the year ended February 29, 2004. February 29, February 28, 2004 2003 (in thousands) Accrued pension liability $ 55,221 $ 36,351 Adverse grape contracts (Note 15) 83,464 22,550 Other 46,304 40,367 $ 184,989 $ 99,268 For the Years Ended February 29, 2004 February 28, 2003 February 28, 2002 % of % of % of Pretax Pretax Pretax Amount Income Amount Income Amount Income (in thousands) Income tax provision at statutory rate $ 120,521 35.0 $ 117,228 35.0 $ 79,580 35.0 State and local income taxes, net of federal income tax benefit 13,032 3.8 10,601 3.2 6,812 3.0 Earnings of subsidiaries taxed at other than U.S. statutory rate (12,170) (3.5) 1,838 0.5 1,105 0.5 Miscellaneous items, net 2,600 0.7 1,963 0.6 3,451 1.5 $ 123,983 36.0 $ 131,630 39.3 $ 90,948 40.0 59 13. PROFIT SHARING AND RETIREMENT SAVINGS PLANS: 12. OTHER LIABILITIES: The major components of other liabilities are as follows: