Constellation Brands Reports Q1 Fiscal 2010 Results

-- Achieves comparable basis diluted EPS of $0.33 and reported basis diluted EPS of $0.03 -- Completes sale of value spirits business -- Decreases debt by more than $110 million during the quarter -- Sees benefits of global cost reduction initiative -- Reaffirms full-year diluted EPS guidance

    First Quarter 2010 Financial Highlights*
    (in millions, except per share data)

                                 Comparable  % Change  Reported  % Change
                                 ----------  --------  --------  --------
    Consolidated net sales             $792       -15%     $792       -15%

    Operating income                   $123        -6%      $83        -8%

    Operating margin                   15.6%  150 bps      10.5%   80 bps

    Equity in earnings of equity
     method investees**                 $63       -13%      $63       -13%

    Earnings before interest and
     taxes (EBIT)                      $186        -9%        -         -

    Net income                          $73         -        $7        NM

    Diluted earnings per share        $0.33        -3%    $0.03        NM

Constellation Brands, Inc. (NYSE: STZ, ASX: CBR), the world's leading wine company, reported today its fiscal 2010 first quarter results. "We are generally pleased with our quarterly results, which were in-line with our expectations," said Rob Sands, president and chief executive officer of Constellation Brands. "To strengthen our position as an industry leader, especially in this challenging economy, we took steps over the past 18 months to shift the focus of our strategy to building must-have brands that return the greatest profits and that represent good value for consumers. We are already seeing the benefits from this strategy as brands such as Woodbridge by Robert Mondavi, Nobilo, Clos du Bois, Kim Crawford and SVEDKA continue to perform well. During the quarter, we also made progress on our global cost reduction initiative which was implemented to mitigate the negative impacts of the turbulent global economy and to create efficiencies to drive long-term sustainable growth."

(Logo: http://www.newscom.com/cgi-bin/prnh/20040119/STZLOGO )


    First Quarter 2010 Net Sales Highlights*
    (in millions)
                        Reported                  Organic
                 ------------------------  ------------------------
                                 Constant                  Constant
                   Net           Currency    Net           Currency
                 Sales % Change    Change  Sales % Change    Change
                 ----- --------    ------  ----- --------    ------
    Consolidated  $792      -15%       -5%  $792       -9%        1%
    Branded Wine  $688      -10%        -   $688       -9%        1%
    Spirits        $60      -43%      -43%   $60       13%       13%
    Other          $44      -28%       -8%   $44      -28%       -8%

    *  Definitions of reported, comparable, organic and constant currency,
       as well as reconciliations of non-GAAP financial measures, are
       contained elsewhere in this news release.

    ** Hereafter referred to as "equity earnings."

    NM=Not meaningful

Net Sales Commentary

Reported consolidated net sales decreased 15 percent due primarily to the impact of year-over-year currency exchange rate fluctuations and the divestitures of the value spirits business, spirits contract production services and certain Pacific Northwest wine brands. Organic net sales increased one percent on a constant currency basis.

Branded wine organic net sales on a constant currency basis increased one percent, which includes a one percent decrease for North America, a six percent increase for Europe, and a seven percent increase for Australia/New Zealand. Key markets are being impacted by planned SKU reductions and continuing economic pressures are driving unfavorable sales mix. However, SG&A reduction efforts are having the expected benefit of offsetting reduced gross profit margins. Net sales for Europe benefited from timing impacts related to the U.K. duty increase.

"During the quarter we integrated the remaining spirits business into our North American wine organization and began refining the structure of our U.S. wine business into a single integrated group with the goal of better serving our trade customers and ultimately consumers," Sands said. "This structure, combined with an unparalleled premium portfolio that includes well-known and admired brands such as Robert Mondavi, Wild Horse, Ravenswood, Estancia and Blackstone, provides us with outstanding opportunities to capture growth in the marketplace."

Total spirits organic net sales increased 13 percent for the quarter, led by a 33 percent gain for SVEDKA Vodka. "The integration of our premium spirits brands into the North American organization went well," Sands continued. "SVEDKA continues to enjoy tremendous momentum and now ranks as the third largest import and fifth largest vodka brand overall in the U.S. The futuristic marketing campaign featuring the iconic fembot resonates well with consumers and we are seeing continuing strong growth particularly in national chains, control states and on-premise."

Operating Income, Net Income, Diluted EPS Commentary

Wines segment operating income decreased $8 million versus the prior quarter. This decrease is primarily due to the divestiture of the value spirits business and certain Pacific Northwest wine brands, negative mix and a decrease in international business performance partially offset by savings from cost reduction initiatives and gains from foreign currency transactions.

Constellation's equity earnings from its 50 percent interest in the Crown Imports joint venture totaled $63 million, a decrease of 10 percent from the prior year first quarter. For first quarter 2010, Crown Imports generated net sales of $636 million, a decrease of five percent, and operating income of $126 million, a decrease of nine percent.

"While the on-premise and convenience channels remain difficult, Crown is seeing some improvement at national chains in the grocery channel as it focuses on optimizing promotional activity through targeted marketing and programming support," said Sands. "In particular, Corona Extra is ramping up its marketing efforts for the peak summer sales season by reprising some of its most iconic television spots and focusing its overall media investment into and through these key periods."

For first quarter 2010, pre-tax restructuring charges, acquisition-related integration costs and unusual items totaled $40 million compared to $41 million for the prior year first quarter.

Interest expense totaled $67 million, a decrease of 23 percent. The decrease was primarily due to a lower average debt balance.

"The improvement in interest expense reflects the significant debt pay down in fiscal 2009 and additional debt reduction during the first quarter as proceeds from the sale of the value spirits business in March 2009 contributed to our on-going deleveraging efforts," said Bob Ryder, Constellation Brands chief financial officer.

Summary

"The macroeconomic environment remains challenging but we continue to focus on the right strategies to generate cash, reduce borrowings, increase return on invested capital, and improve the bottom line. We are striving to better align our businesses in the U.K. and Australia to provide opportunity for increased efficiencies and cost savings, which are among our top priorities during these tumultuous times," Sands concluded. "Through prudent, targeted actions, coupled with some of the strongest brands in the industry, we believe we are well-positioned to benefit from the upturn in the economy when it occurs. Finally, I would like to thank our Constellation colleagues around the world for their hard work and dedication as we focus on achieving our goals for fiscal 2010."

Outlook

The table below sets forth management's current diluted EPS expectations for fiscal year 2010 compared to fiscal year 2009 actual results, both on a reported basis and a comparable basis.


                   Constellation Brands Fiscal Year 2010
                    Diluted Earnings Per Share Outlook

                           Reported Basis            Comparable Basis
                       ---------------------       --------------------
                         FY10          FY09          FY10         FY09
                       Estimate       Actual       Estimate      Actual
                       --------       ------       --------      ------
    Fiscal Year
     Ending Feb. 28  $0.97 - $1.07   ($1.40)    $1.60 - $1.70    $1.60

Full-year fiscal 2010 guidance includes the following current assumptions:

    --  Interest expense: approximately $265 - $285 million
    --  Tax rate: approximately 53 percent on a reported basis, as compared to
        38 percent on a comparable basis, primarily due to  a provision of 9
        percentage points associated with the March 2009 sale of the value
        spirits business and 5 percentage points related to international
        restructuring activities with minimal tax benefits
    --  Weighted average diluted shares outstanding: approximately 222 million

    --  Free cash flow: $230 - $270 million

Conference Call

A conference call to discuss first quarter fiscal 2010 results and outlook for fiscal 2010 will be hosted by President and Chief Executive Officer Rob Sands and Executive Vice President and Chief Financial Officer Bob Ryder on Wednesday, July 1, 2009 at 10:30 a.m. (eastern). The conference call can be accessed by dialing +973-935-8505 beginning 10 minutes prior to the start of the call. A live listen-only webcast of the conference call, together with a copy of this news release (including the attachments) and other financial information that may be discussed in the call will be available on the Internet at Constellation's Web site: www.cbrands.com under "Investors," prior to the call.

Explanations

Reported basis ("reported") operating income, net income and diluted EPS are as reported under generally accepted accounting principles. Operating income, net income and diluted EPS on a comparable basis ("comparable"), exclude restructuring charges, acquisition-related integration costs and unusual items. The company's measure of segment profitability excludes restructuring charges, acquisition-related integration costs and unusual items, which is consistent with the measure used by management to evaluate results.

The company discusses additional non-GAAP measures in this news release, including constant currency net sales, organic net sales, comparable basis EBIT and free cash flow.

Tables reconciling non-GAAP measures, together with definitions of these measures and the reasons management uses these measures, are included in

this news release.

About Constellation Brands

Constellation Brands is the world's leading wine company, with a broad portfolio of widely admired premium brands across the wine, beer and spirits categories. Our company achieves success through an unmatched knowledge of wine consumers paired with storied brands that suit their varied lives and tastes. Our portfolio of brands include Robert Mondavi, Hardys, Clos du Bois, Blackstone, Banrock Station, Arbor Mist, Estancia, Ravenswood, Jackson-Triggs, Kim Crawford, Corona Extra, Black Velvet Canadian Whisky and SVEDKA Vodka.

Constellation Brands (NYSE: STZ and STZ.B; ASX: CBR) is an S&P 500 Index and Fortune 1000(R) company with more than 100 total brands in our portfolio, sales in about 150 countries and operations in approximately 50 facilities. The company believes that industry leadership involves a commitment to our brands, to the trade, to the land, to investors and to the different people around the world who turn to our products when celebrating big moments or enjoying quiet ones. We express this commitment through our vision: to elevate life with every glass raised. To learn more about Constellation Brands and its product portfolio visit the company's web site at www.cbrands.com.

Forward-Looking Statements

The statements made under the heading Outlook, and all statements other than statements of historical facts set forth in this news release regarding Constellation's business strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of management, as well as information concerning expected actions of third parties, are forward-looking statements (collectively, the "Projections") that involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by the Projections.

During the current quarter, Constellation may reiterate the Projections. Prior to the start of the company's quiet period, which will begin at the close of business on Aug. 24, 2009, the public can continue to rely on the Projections as still being Constellation's current expectations on the matters covered, unless Constellation publishes a notice stating otherwise. During Constellation's "quiet period," the Projections should not be considered to constitute the company's expectations and should be considered historical, speaking as of prior to the quiet period only and not subject to update by the company.

The Projections are based on management's current expectations and, unless otherwise noted, do not take into account the impact of any future acquisition, merger or any other business combination, divestiture, restructuring or other strategic business realignments, or financing that may be completed after the date of this release. The Projections should not be construed in any manner as a guarantee that such results will in fact occur.

In addition to the risks and uncertainties of ordinary business operations, the Projections of the company contained in this news release are subject to a number of risks and uncertainties, including:

    --  successful integration of acquired businesses and realization of
        expected synergies;
    --  completion of various portfolio actions;
    --  achievement of all expected cost savings from the company's various
        restructuring plans, realization of expected asset sale proceeds from
        the sale of inventory and other assets, and receipt of all consideration
        from the divestiture of the value spirits business;
    --  accuracy of the bases for forecasts relating to joint ventures and
        associated costs and capital investment requirements;
    --  restructuring charges, acquisition-related integration costs, other
        one-time costs and purchase accounting adjustments associated with
        integration and restructuring plans may vary materially from
        management's current estimates due to variations in one or more of
        anticipated headcount reductions, contract terminations, costs or timing
        of plan implementation;
    --  raw material supply, production or shipment difficulties could adversely
        affect the company's ability to supply its customers;
    --  increased competitive activities in the form of pricing, advertising and
        promotions could adversely impact consumer demand for the company's
        products and/or result in lower than expected sales or higher than
        expected expenses;
    --  general economic, geo-political and regulatory conditions, prolonged
        downturn in the economic markets in the U.S. and in the company's
        major markets outside of the U.S., continuing instability in world
        financial markets, or unanticipated environmental liabilities and costs;
    --  changes to accounting rules and tax laws, and other factors which could
        impact the company's reported financial position or effective tax
        rate;
    --  changes in interest rates and the inherent unpredictability of currency
        fluctuations, commodity prices and raw material costs; and

    --  other factors and uncertainties disclosed in the company's filings
        with the Securities and Exchange Commission, including its Annual Report
        on Form 10-K for the fiscal year ended Feb. 28, 2009,  which could cause
        actual future performance to differ from current expectations.



    Constellation Brands, Inc. and Subsidiaries
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in millions)
                                                   May 31,  February 28,
                                                    2009       2009
                                                  --------  -----------
     Assets

       Current Assets:
         Cash and cash investments                   $16.8       $13.1
         Accounts receivable, net                    715.9       524.6
         Inventories                               1,846.0     1,828.7
         Prepaid expenses and other                  188.0       168.1
                                                     -----       -----

           Total current assets                    2,766.7     2,534.5

       Property, plant and equipment, net          1,633.0     1,547.5
       Goodwill                                    2,540.3     2,615.0
       Intangible assets, net                      1,019.7     1,000.6
       Other assets, net                             441.8       338.9
                                                     -----       -----

         Total assets                             $8,401.5    $8,036.5
                                                  ========    ========

     Liabilities and Stockholders' Equity

       Current Liabilities:
         Notes payable to banks                     $353.5      $227.3
         Current maturities of long-term debt        256.2       235.2
         Accounts payable                            276.2       288.7
         Accrued excise taxes                         69.8        57.6
         Other accrued expenses and liabilities      600.0       517.6
                                                     -----       -----

           Total current liabilities               1,555.7     1,326.4

       Long-term debt, less current maturities     3,712.1     3,971.1
       Deferred income taxes                         524.0       543.6
       Other liabilities                             284.5       287.1
                                                     -----       -----

         Total liabilities                         6,076.3     6,128.2

         Total stockholders' equity                2,325.2     1,908.3
                                                   -------     -------

         Total liabilities and stockholders'
          equity                                  $8,401.5    $8,036.5
                                                  ========    ========



    Constellation Brands, Inc. and Subsidiaries
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (in millions, except per share data)
                                                   Three Months Ended
                                                  --------------------
                                                    May 31,   May 31,
                                                    2009       2008
                                                  ---------  --------

     Sales                                         $1,003.8  $1,212.0
     Excise taxes                                    (212.2)   (280.2)
                                                     ------    ------
       Net sales                                      791.6     931.8

     Cost of product sold                            (522.9)   (602.8)
                                                     ------    ------
       Gross profit                                   268.7     329.0

     Selling, general and administrative expenses    (166.6)   (233.5)
     Restructuring charges                            (18.9)     (0.5)
     Acquisition-related integration costs             (0.1)     (4.3)
                                                       ----      ----
       Operating income                                83.1      90.7

     Equity in earnings of equity method investees     62.8      72.1
     Interest expense, net                            (66.8)    (86.6)
                                                      -----     -----
       Income before income taxes                      79.1      76.2

     Provision for income taxes                       (72.6)    (31.6)
                                                      -----     -----
       Net income                                      $6.5     $44.6
                                                       ====     =====


     Earnings Per Common Share:
       Basic - Class A Common Stock                   $0.03     $0.21
       Basic - Class B Common Stock                   $0.03     $0.19

       Diluted - Class A Common Stock                 $0.03     $0.20
       Diluted - Class B Common Stock                 $0.03     $0.19

     Weighted Average Common Shares Outstanding:
       Basic - Class A Common Stock                 195.233   192.792
       Basic - Class B Common Stock                  23.744    23.769

       Diluted - Class A Common Stock               219.820   219.186
       Diluted - Class B Common Stock                23.744    23.769



    Constellation Brands, Inc. and Subsidiaries
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in millions)
                                                        Three Months Ended
                                                       --------------------
                                                         May 31,    May 31,
                                                         2009       2008
                                                       ---------  ---------
     Cash Flows From Operating Activities
       Net income                                           $6.5      $44.6
         Adjustments to reconcile net income to
         net cash used in operating activities:
            Depreciation of property, plant and equipment   34.1       41.2
            Stock-based compensation expense                12.2       10.8
            Amortization of intangible and other assets      3.1        3.0
            Loss on businesses sold or held for sale         0.8       16.0
            Loss on disposal or impairment of
             long-lived assets, net                          0.4        0.1
            Deferred tax provision                         (27.1)       3.2
            Equity in earnings of equity method
             investees, net of distributed earnings        (23.6)     (23.0)
            Change in operating assets and liabilities,
             net of effects from purchases and sales of
             businesses:
               Accounts receivable, net                   (132.8)     (53.1)
               Inventories                                  34.5      (69.0)
               Prepaid expenses and other current assets     4.9        6.8
               Accounts payable                            (28.2)      14.4
               Accrued excise taxes                          6.0       18.3
               Other accrued expenses and liabilities       55.2      (58.7)
            Other, net                                      (0.8)      12.7
                                                            ----       ----
                 Total adjustments                         (61.3)     (77.3)
                                                           -----      -----
                  Net cash used in operating activities    (54.8)     (32.7)
                                                           -----      -----

     Cash Flows From Investing Activities
       Proceeds from sale of business                      270.2          -
       Proceeds from sales of assets                         1.2        0.8
       Purchases of property, plant and equipment          (47.1)     (22.2)
       Investment in equity method investee                 (0.3)         -
       Purchase of business, net of cash acquired              -       (2.1)
       Other investing activities                            0.3        7.8
                                                             ---        ---
                  Net cash provided by (used in)
                   investing activities                    224.3      (15.7)
                                                           -----      -----

     Cash Flows From Financing Activities
       Principal payments of long-term debt               (269.5)     (49.5)
       Net proceeds from notes payable                      98.6       85.8
       Exercise of employee stock options                    3.4       12.1
       Excess tax benefits from stock-based
        payment awards                                       1.2        4.7
                                                             ---        ---
                  Net cash (used in) provided by
                   financing activities                   (166.3)      53.1
                                                          ------       ----

       Effect of exchange rate changes on cash
        and cash investments                                 0.5          -
                                                             ---        ---

      Net increase in cash and cash equivalents              3.7        4.7
      Cash and cash investments, beginning of period        13.1       20.5
                                                            ----       ----
      Cash and cash investments, end of period             $16.8      $25.2
                                                           =====      =====



    Constellation Brands, Inc. and Subsidiaries
    SEGMENT INFORMATION
    (in millions)
                                         Three Months Ended
                                        --------------------
                                          May 31,    May 31,     Percent
                                          2009       2008         Change
                                        ---------  ---------
    Segment Net Sales and Operating Income
      Constellation Wines (1)
         Branded wine net sales            $687.9     $765.7        (10%)
         Spirits net sales                   60.1      105.6        (43%)
         Other net sales                     43.6       60.5        (28%)
                                             ----       ----
           Segment net sales               $791.6     $931.8        (15%)
           Operating income                $147.6     $155.3         (5%)
           % Net sales                       18.6%      16.7%
           Equity in earnings of
            equity method investees         $(0.1)      $2.4         NM

       Crown Imports
           Segment net sales               $635.8     $672.5         (5%)
           Operating income                $126.0     $138.6         (9%)
           % Net sales                       19.8%      20.6%

       Consolidation and Eliminations
           Segment net sales              $(635.8)   $(672.5)        (5%)
           Operating income               $(126.0)   $(138.6)        (9%)
           Equity in earnings of
            Crown Imports                   $62.9      $69.7        (10%)

       Corporate Operations and Other
           Consolidated net sales          $791.6     $931.8        (15%)
           Operating income                $(24.3)    $(24.0)         1%
           % Net sales                        3.1%       2.6%


     NM = Not Meaningful

    (1) In connection with the Company's divestiture of its value spirits
        business and the integration of the retained spirits brands into the
        Constellation Wines business, the Company changed its internal
        management financial reporting on May 1, 2009.  The Company now
        reports its operating results in three segments:  Constellation Wines,
        Crown Imports and Corporate Operations and Other.  Prior results have
        been restated to conform with the new segment presentation.



    Constellation Brands, Inc. and Subsidiaries
    GEOGRAPHIC INFORMATION
    (in millions)
                               Three Months Ended                   Constant
                              --------------------                  Currency
                               May 31,    May 31,  Percent Currency  Percent
                                2009       2008    Change   Impact  Change(3)
                              --------    --------
    Geographic Net Sales (1)(2)
       North America           $572.2     $652.5     (12%)    (3%)     (10%)
         Branded wine          $500.4     $530.7      (6%)    (3%)      (3%)
         Spirits                $60.1     $105.6     (43%)     -       (43%)
         Other                  $11.7      $16.2     (28%)    (9%)     (19%)

       Europe                  $144.5     $182.1     (21%)   (27%)       6%
         Branded wine          $113.1     $143.0     (21%)   (27%)       6%
         Other                  $31.4      $39.1     (20%)   (27%)       8%

       Australia/New Zealand    $74.9      $97.2     (23%)   (25%)       2%
         Branded wine           $74.4      $92.0     (19%)   (26%)       7%
         Other                   $0.5       $5.2     (90%)     2%      (92%)


                                                                       Organic
                                                                      Constant
                             Three Months Ended       Divest-         Currency
                             ------------------        iture           Percent
                               May 31, May 31, Percent Impact Currency Change
                                 2009     2008  Change   (4)   Impact   (3)
                               ------- -------
    Branded Wine Geographic
     Net Sales (1)(2)
       North America            $500.4   $530.7    (6%)   (1%)    (3%)   (1%)
       Europe                    113.1    143.0   (21%)    -     (27%)    6%
       Australia/New Zealand      74.4     92.0   (19%)    -     (26%)    7%
                                  ----     ----
       Consolidated branded
        wine net sales          $687.9   $765.7   (10%)   (1%)   (10%)    1%
                                ======   ======

    (1)  Refer to discussion under "Reconciliation of Reported, Organic and
         Constant Currency Net Sales" on following page for definition of
         constant currency net sales and organic constant currency net sales
         and reasons for use.

    (2)  Net sales are attributed to countries based on the location of the
         selling company.

    (3)  May not sum due to rounding as each item is computed independently.

    (4)  Divestiture impact includes the removal of branded wine net sales
         associated with the Pacific Northwest brands for the period March 1,
         2008, through May 31, 2008, included in the three months ended May
         31, 2008.



    Constellation Brands, Inc. and Subsidiaries
    RECONCILIATION OF REPORTED, ORGANIC AND CONSTANT CURRENCY NET SALES
    (in millions)

    As the company sold certain Pacific Northwest wine brands on June 5, 2008;
    exited certain spirits production contracts in connection with the sale of
    a Canadian distilling facility on August 31, 2008; and sold certain value
    spirits brands on March 24, 2009, organic net sales for the three months
    ended May 31, 2008, are defined by the company as reported net sales less
    net sales of Pacific Northwest wine brands and/or net sales of certain
    spirits contract production services and/or value brands, as appropriate.
    Organic net sales and percentage increase (decrease) in constant currency
    net sales (which excludes the impact of year over year currency exchange
    rate fluctuations) are provided because management uses this information
    in monitoring and evaluating the underlying business trends of the
    continuing operations of the company.  In addition, the company believes
    this information provides investors better insight on underlying business
    trends and results in order to evaluate year over year financial
    performance.

                                                                      Constant
                                   Three Months Ended                 Currency
                                   ------------------                  Percent
                                     May 31,  May 31,  Percent Currency Change
                                       2009     2008    Change  Impact   (1)
                                     -------  -------
    Consolidated Net Sales
      Branded wine                    $687.9   $765.7    (10%)   (10%)     -
      Spirits                           60.1    105.6    (43%)     -     (43%)
      Other                             43.6     60.5    (28%)   (20%)    (8%)
                                        ----     ----
        Consolidated
         reported net sales            791.6    931.8    (15%)   (10%)    (5%)
      Less:  Pacific Northwest
       branded wine net sales (2)          -     (7.9)
      Less:  Spirits net sales (3)         -    (52.6)
                                         ---    -----
        Consolidated organic
         net sales                    $791.6   $871.3     (9%)   (10%)     1%
                                      ======   ======


    Branded Wine Net Sales
      Branded wine
       reported net sales             $687.9   $765.7    (10%)   (10%)     -
      Less:  Pacific Northwest
       branded wine net sales (2)          -     (7.9)
                                         ---     ----
        Branded wine organic
         net sales                    $687.9   $757.8     (9%)   (10%)     1%
                                      ======   ======


    Spirits Net Sales
      Spirits reported net sales       $60.1   $105.6    (43%)     -     (43%)
      Less:  Spirits net sales (3)         -    (52.6)
                                         ---    -----
        Spirits organic net sales      $60.1    $53.0     13%      -      13%
                                       =====    =====

    (1) May not sum due to rounding as each item is computed independently.

    (2) For the period March 1, 2008, through May 31, 2008, included in the
        three months ended May 31, 2008.

    (3) Includes certain spirits contract production services net sales for
        the period March 1, 2008, through May 31, 2008, and certain spirits
        value brands net sales for the period March 25, 2008, through May 31,
        2008, included in the three months ended May 31, 2008.



    Constellation Brands, Inc. and Subsidiaries
    RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
    (in millions, except per share data)

                                  Three Months Ended May 31, 2009
                         ---------------------------------------------------
                                                 Strategic        Comparable
                         Reported                Business            Basis
                           Basis     Inventory   Realign-            (Non-
                           (GAAP)     Step-up     ment(2)    Other    GAAP)
                         ---------------------------------------------------
    Net Sales              $791.6                                     $791.6
      Cost of product
       sold                (522.9)       2.7        4.8               (515.4)
                           ------        ---        ---        ---    ------
    Gross Profit            268.7        2.7        4.8          -     276.2
      Selling, general
       and administrative
       expenses ("SG&A")   (166.6)                 13.7               (152.9)
      Restructuring
       charges              (18.9)                 18.9                    -
      Acquisition-related
       integration costs     (0.1)                  0.1                    -
                             ----        ---        ---        ---       ---
    Operating Income         83.1        2.7       37.5          -     123.3
      Equity in earnings
       of equity method
       investees             62.8                                       62.8
                                                                        ----
    EBIT                                                               186.1
      Interest
       expense, net         (66.8)                                     (66.8)
                            -----        ---       ----        ---     -----
    Income Before
     Income Taxes            79.1        2.7       37.5          -     119.3
      (Provision for)
       benefit from
       income taxes         (72.6)      (1.1)      27.1          -     (46.6)
                            -----       ----       ----        ---     -----
    Net Income               $6.5       $1.6      $64.6         $-     $72.7
                             ====       ====      =====        ===     =====
    Diluted Earnings
     Per Common Share       $0.03      $0.01      $0.29         $-     $0.33
                            =====      =====      =====        ===     =====
    Weighted Average
     Common Shares
     Outstanding -
     Diluted              219.820    219.820    219.820    219.820   219.820
                          =======    =======    =======    =======   =======

    Gross Margin             33.9%                                      34.9%
    SG&A as a percent
     of net sales            21.0%                                      19.3%
    Operating Margin         10.5%                                      15.6%
    Effective Tax Rate         NM                                       39.1%
                              ---                                       ----


                                       Three Months Ended May 31, 2008
                         ---------------------------------------------------
                                                 Strategic         Comparable
                          Reported               Business             Basis
                           Basis      Inventory  Realign-             (Non-
                           (GAAP)      Step-up    ment(2)    Other     GAAP)
                         ---------------------------------------------------
    Net Sales              $931.8                                     $931.8
      Cost of product
       sold                (602.8)       6.3        4.0        0.1    (592.4)
                           ------        ---        ---        ---    ------
    Gross Profit            329.0        6.3        4.0        0.1     339.4
      Selling, general
       and administrative
       expenses ("SG&A")   (233.5)                 25.4               (208.1)
      Restructuring
       charges               (0.5)                  0.5                    -
      Acquisition-related
       integration costs     (4.3)                  4.3                    -
                             ----        ---        ---        ---       ---
    Operating Income         90.7        6.3       34.2        0.1     131.3
      Equity in earnings of
       equity method
       investees             72.1                                       72.1
                                                                        ----
    EBIT                                                               203.4
      Interest
       expense, net         (86.6)                                     (86.6)
                            -----        ---       ----        ---     -----
    Income Before
     Income Taxes            76.2        6.3       34.2        0.1     116.8
      (Provision for)
       benefit from
       income taxes         (31.6)      (2.4)      (9.2)         -     (43.2)
                            -----       ----       ----        ---     -----
    Net Income              $44.6       $3.9      $25.0       $0.1     $73.6
                            =====       ====      =====       ====     =====
    Diluted Earnings
     Per Common Share       $0.20      $0.02      $0.11         $-     $0.34
                            =====      =====      =====        ===     =====
    Weighted Average
     Common Shares
     Outstanding -
     Diluted              219.186    219.186    219.186    219.186   219.186
                          =======    =======    =======    =======   =======

    Gross Margin             35.3%                                      36.4%
    SG&A as a percent
     of net sales            25.1%                                      22.3%
    Operating Margin          9.7%                                      14.1%
    Effective Tax Rate       41.5%                                      37.0%
                             ----                                       ----


                                           Percent        Percent
                                          Change -        Change -
                                          Reported        Comparable
                                            Basis           Basis
                                            (GAAP)        (Non-GAAP)
                                          --------        ----------
    Net Sales                                (15%)           (15%)
      Cost of product sold                   (13%)           (13%)
    Gross Profit                             (18%)           (19%)
      Selling, general and
       administrative expenses ("SG&A")      (29%)           (27%)
      Restructuring charges                   NM             N/A
      Acquisition-related integration costs   NM             N/A
    Operating Income                          (8%)            (6%)
      Equity in earnings of equity
       method investees                      (13%)           (13%)
    EBIT                                     N/A              (9%)
      Interest expense, net                  (23%)           (23%)
    Income Before Income Taxes                 4%              2%
      (Provision for) benefit from
       income taxes                           NM               8%
    Net Income                                NM              (1%)
    Diluted Earnings Per Common Share         NM              (3%)
    Weighted Average Common Shares
     Outstanding - Diluted

    Gross Margin
    SG&A as a percent of net sales
    Operating Margin
    Effective Tax Rate

Constellation Brands, Inc. and Subsidiaries

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)

NOTES

    1. The company reports its financial results in accordance with generally
       accepted accounting principles in the U.S. ("GAAP").  However,
       non-GAAP financial measures, as defined in the reconciliation tables
       above, are provided because management uses this information in
       evaluating the results of the continuing operations of the company and/or
       internal goal setting.  In addition, the company believes this
       information provides investors better insight on underlying business
       trends and results in order to evaluate year over year financial
       performance.  See the tables above for supplemental financial data and
       corresponding reconciliations of these non-GAAP financial measures to
       GAAP financial measures for the three months ended May 31, 2009, and May
       31, 2008.  Non-GAAP financial measures should be viewed in addition to,
       and not as an alternative for, the company's reported results
       prepared in accordance with GAAP.  Please refer to the company's Web
       site at http://www.cbrands.com/CBI/investors.htm for more detailed
       description and further discussion of these non-GAAP financial measures.

    2. For the three months ended May 31, 2009, strategic business realignment
       items primarily include tax expense associated with the March 2009
       divestiture of the value spirits business of $37.5 million and costs
       recognized by the company in connection with the Global Initiative of
       $21.2 million, net of a tax benefit of $9.5 million.  For the three
       months ended May 31, 2008, strategic business realignment items primarily
       include (i)  the loss, primarily on assets held for sale, in connection
       with the divestiture of the Pacific Northwest wine brands (announced on
       June 10, 2008), of $17.3 million, net of a tax benefit of $6.1 million,
       and (ii)  costs recognized by the company primarily in connection with
       the Fiscal 2008 Plan of $5.6 million, net of a tax benefit of $2.3
       million.

DEFINITIONS

Global Initiative

The company's plan announced in April 2009 to simplify its business, increase efficiencies and reduce its cost structure on a global basis (the "Global Initiative").

Australian Initiative

The company's plan announced in August 2008 to sell certain assets and implement operational changes designed to improve the efficiencies and returns associated with its Australian business (the "Australian Initiative").

Fiscal 2008 Plan

The company's plan announced in November 2007 to streamline certain of its international operations, primarily in Australia; certain other restructuring charges incurred during the third quarter of fiscal 2008 in connection with the consolidation of certain spirits production processes in the U.S.; and its plan announced in January 2008 to streamline certain of its operations in the U.S., primarily in connection with the restructuring and integration of the operations of Beam Wine Estates, Inc. ("BWE") (collectively, the "Fiscal 2008 Plan").

Fiscal 2007 Wine Plan

The company's plan announced in August 2006 to invest in new distribution and bottling facilities in the U.K. and to streamline certain Australian wine operations (collectively, the "Fiscal 2007 Wine Plan").



    Constellation Brands, Inc. and Subsidiaries
    RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
    GUIDANCE - DILUTED EARNINGS PER SHARE AND FREE CASH FLOW
    (in millions, except per share data)

                                                     Range for the Year
    Diluted Earnings Per Share Guidance           Ending February 28, 2010
                                                  ------------------------
    Forecasted diluted earnings per share -
     reported basis (GAAP)                         $0.97           $1.07
       Inventory step-up                            0.03            0.03
       Strategic business realignment (1)           0.60            0.60
                                                    ----            ----
    Forecasted diluted earnings per share -
     comparable basis (Non-GAAP) (2)               $1.60           $1.70
                                                   =====           =====

                                                               Actual for
                                                              the Year Ended
                                                               February 28,
                                                                    2009
                                                              ---------------
    Diluted earnings per share - reported basis (GAAP)            $(1.40)
      Inventory step-up                                             0.06
      Strategic business realignment (1)                            0.97
      Other (3)                                                     1.94
    Impact of anti-dilutive potential common shares (4)             0.03
                                                                    ----
    Diluted earnings per share - comparable basis (Non-GAAP) (2)   $1.60
                                                                   =====

    (1) Includes $0.34, $0.17, $0.06 and $0.03 diluted earnings per share for
        the year ending February 28, 2010, associated with the Global
        Initiative; tax expense associated with the March 2009 divestiture of
        the value spirits business; the Australian Initiative; and other
        previously announced restructuring plans, respectively.  Includes
        $0.63, $0.09, $0.08, $0.08, $0.05, $0.02 and $0.02 diluted earnings
        per share for the year ended February 28, 2009, associated with the
        Australian Initiative; a loss, primarily on assets held for sale, in
        connection with the March 2009 divestiture of the value spirits
        business; a loss in connection with the June 2008 divestiture of the
        Pacific Northwest wine brands; the Fiscal 2007 Wine Plan; the Fiscal
        2008 Plan; a loss in connection with the sale of a Canadian distilling
        facility; and other previously announced restructuring plans,
        respectively.(2)

    (2) May not sum due to rounding as each item is computed independently.

    (3) Includes $1.23, $0.38, $0.18 and $0.15 diluted earnings per share for
        the year ended February 28, 2009, associated with impairments of
        certain goodwill and intangible assets; impairments of certain equity
        method investments; the recognition of income tax expense in
        connection with the gain on settlement of certain foreign currency
        economic hedges; and a loss on the adjustment of certain inventory,
        primarily Australian, related to prior years; respectively. (2)

    (4) In accordance with the antidilution provisions of SFAS No. 128, the
        dilutive impact of potential common shares is excluded from the
        company's reported diluted loss per share calculation for the year
        ended February 28, 2009.  As a result of the company having net income
        on a comparable basis for the year ended February 28, 2009, the
        dilutive impact of potential common shares is included in the
        company's comparable diluted earnings per share calculation.


    Free Cash Flow Guidance
    Free cash flow, as defined in the reconciliation below, is considered a
    liquidity measure and is considered to provide useful information to
    investors about the amount of cash generated, which can then be used,
    after required debt service and dividend payments, for other general
    corporate purposes.  A limitation of free cash flow is that it does not
    represent the total increase or decrease in the cash balance for the
    period.  Free cash flow should be considered in addition to, not as a
    substitute for, or superior to, cash flow from operating activities
    prepared in accordance with GAAP.

                                                       Range for the Year
                                                    Ending February 28, 2010
                                                    ------------------------

    Net cash provided by operating activities (GAAP) $380.0          $440.0
      Purchases of property, plant and equipment     (150.0)         (170.0)
                                                     ------          ------
    Free cash flow (Non-GAAP)                        $230.0          $270.0
                                                     ======          ======

                                                                  Actual for
                                                                  the Three
                                                                Months Ended
                                                                May 31, 2009
                                                                ------------

    Net cash used in operating activities (GAAP)                     $(54.8)
      Purchases of property, plant and equipment                      (47.1)
                                                                      -----
    Free cash flow (Non-GAAP)                                       $(101.9)
                                                                    =======

SOURCE Constellation Brands, Inc.


http://www.cbrands.com