Constellation Brands Reports Q2 Fiscal 2008 Results

- Strong cash flow drives debt reduction

- U.S. distributor inventory reduction substantially completed

- Company increases full-year guidance

FAIRPORT, N.Y., Oct. 4 /PRNewswire-FirstCall/ -- Constellation Brands, Inc. (NYSE: STZ, ASX: CBR), a leading international producer and marketer of beverage alcohol, today reported diluted earnings per share ("EPS") on a reported basis of $0.33 for the quarter ended Aug. 31, 2007 ("second quarter 2008"), compared with $0.28 for the prior year second quarter. On a comparable basis, second quarter 2008 diluted EPS totaled $0.35 versus $0.43 for the prior year.

"We have substantially completed our previously announced U.S. wine distributor inventory reduction initiative during the second quarter," stated Rob Sands, Constellation Brands president and chief executive officer. "For the quarter, we delivered solid cash flow and reduced our debt by more than $200 million from first quarter levels. As anticipated, both the U.S. wine distributor inventory reduction and the lingering softness in our U.K. business impacted our overall performance. However, we believe the distributor inventory initiative, as well as our ongoing efforts to improve performance in the U.K., will better position us for long-term growth."


    Second Quarter 2008 Net Sales Highlights*
    (in millions)
                           --Reported--              --Organic--
                                         Constant                   Constant
                           Net           Currency    Net            Currency
                          Sales  Change   Change    Sales  Change    Change
    Consolidated           $893    -37 %     -39 %   $881      2 %       -1 %
    Branded Wine           $739      3 %      -1 %   $739      1 %       -3 %
    Imported Beers            -   -100 %    -100 %
    Spirits                $105     25 %      25 %    $93     11 %       11 %
    Wholesale/other         $49    -82 %     -84 %    $49      7 %       -1 %


    Second Quarter 2008 Profit Highlights*
    (in millions, except per share data)

                              Reported     Change     Comparable  Change

    Operating income            $117        -35%         $125      -47%
    Equity in earnings of
     equity method
     investees**                 $80         NM           $80       NM
    Earnings before
     interest and taxes
     (EBIT)                       -           -          $205      -14%
    Operating margin            13.1%      +30 bps       14.0%   - 270 bps
    Net income                   $72          5%          $77      -26%
    Diluted EPS                $0.33         18%        $0.35      -19%

    *  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

The reported consolidated net sales decrease of 37 percent primarily reflects the benefits of the SVEDKA Vodka acquisition, more than offset by the impact of reporting the Crown Imports and Matthew Clark wholesale business joint ventures under the equity method. Organic net sales decreased one percent on a constant currency basis.

Branded wine net sales decreased one percent on a constant currency basis and decreased three percent on an organic constant currency basis. For North America, branded wine net sales decreased four percent on a constant currency basis, reflecting strong growth in Canada that was more than offset by Constellation's initiative to reduce distributor inventory levels in the U.S.

"Our Canadian business turned in a solid performance for the quarter, driven by very good results from Jackson-Triggs, Sawmill Creek, Inniskillin and new products," explained Sands. "Our premium U.S. wine portfolio continues to deliver solid marketplace performance with brands such as Woodbridge by Robert Mondavi, Kim Crawford, Nobilo, Estancia, Toasted Head and Simi.

Organic net sales for branded wine for Europe increased four percent on a constant currency basis, primarily due to higher sales of popular priced wine in mainland Europe, and a slight increase in sales for the U.K. On a constant currency basis, net sales for Australia/New Zealand branded wine decreased seven percent. The branded wine market in the U.K. and Australia reflects ongoing competitive challenges and continued pricing pressure.

Total spirits net sales increased 25 percent for the quarter, primarily due to the March 2007 acquisition of SVEDKA Vodka, while organic net sales were up 11 percent primarily due to higher average selling prices and volume gains.

"SVEDKA continued to be a stellar performer and maintained an excellent growth rate in the second quarter," said Sands. "SVEDKA's growing appeal validates our point of view about continued U.S. consumer interest in, and demand for, premium spirits. Additionally, our 99 Schnapps family, Ridgemont Reserve 1792 bourbon, Meukow cognac and recently launched products turned in solid performances."

Operating Income, Net Income, Diluted EPS Commentary

The decrease in operating income and the increase in equity earnings for second quarter 2008 were primarily due to the impact of reporting $78.8 million of equity earnings from the Crown Imports joint venture under the equity method. "Our Crown Imports joint venture is gaining traction and we look for continued growth as we strive to maximize the long-term potential for Corona and the other brands in the joint venture's leading imported beer portfolio in the U.S.," stated Sands.

Wines segment operating income decreased $38.9 million versus the prior year. This was primarily due to lower net sales associated with efforts to reduce distributor inventories in the U.S. and the impact of the U.K. and Australia business performance, partially offset by the increased contribution from the Canadian business.

Spirits segment operating income increased $3.2 million primarily due to the addition of SVEDKA and from the increase in base business net sales, offset somewhat by higher material costs.

For the second quarter, acquisition-related integration costs, restructuring and related charges and unusual items totaled $8.0 million, compared with $53.9 million for the prior year. Net income and diluted EPS were also impacted by interest expense, which increased 20 percent to $86.7 million for second quarter 2008, primarily due to the financing of the SVEDKA acquisition and $500 million of share repurchases. Due to strong free cash flow generated during the quarter, total debt decreased by more than $200 million from first quarter levels.

Share Repurchases

During the second quarter, the company received an additional 0.9 million shares under the accelerated share repurchase transaction announced in May 2007, which completed the transaction. The company did not make any additional cash payments in connection with receipt of these shares. For the first half of fiscal 2008, the company purchased 21.3 million shares of its class A common stock through a combination of open market repurchases and an accelerated share repurchase transaction at an aggregate cost of $500 million, or an average of $23.44 per share.

Outlook

The table below sets forth management's current diluted earnings per share expectations for fiscal year 2008 compared to fiscal year 2007 actual results, both on a reported basis and a comparable basis.



Constellation Brands Fiscal Year 2008
Diluted Earnings Per Share Outlook

                             Reported Basis            Comparable Basis
                            FY08          FY07          FY08         FY07
                          Estimate       Actual       Estimate      Actual
    Fiscal Year
    Ending Feb. 29
    or Feb. 28          $1.20 - $1.28    $1.38      $1.34 - $1.42    $1.68


    Full-year fiscal 2008 guidance includes the following current assumptions:
    -- Net sales: low single-digit growth in organic net sales and low single-
       digit incremental benefit from the acquisitions of Vincor International
       Inc. and the SVEDKA Vodka brand and related business. As a result of
       these increases, and the impact of reporting the Crown Imports joint
       venture and the joint venture for the Matthew Clark wholesale business
       under the equity method, reported net sales are expected to decrease 30
       to 32 percent from net sales for fiscal year 2007
    -- Interest expense: approximately $330 - $340 million
    -- Stock compensation expense: approximately $30 million
    -- Tax rate: approximately 39 percent on a reported basis, which includes
       a provision of approximately two percentage points related to the loss
       on disposal in connection with the company's contribution of its U.K.
       wholesale business to the Matthew Clark joint venture and the
       repatriation of proceeds associated with this transaction, or
       approximately 37 percent on a comparable basis
    -- Weighted average diluted shares outstanding: approximately 225 million
    -- Free cash flow: $160 - $180 million

    Conference Call

A conference call to discuss second quarter 2008 results and outlook will be hosted by President and Chief Executive Officer Rob Sands and Executive Vice President and Chief Financial Officer Bob Ryder on Thursday, Oct. 4, 2007 at 10:00 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, equity in earnings of equity method investees, net income and diluted earnings per share are as reported under generally accepted accounting principles. Operating income, equity in earnings of equity method investees, net income and diluted earnings per share on a comparable basis ("comparable"), exclude acquisition-related integration costs, restructuring and related charges and unusual items. The company's measure of segment profitability excludes acquisition-related integration costs, restructuring and related charges 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, Inc. is a leading international producer and marketer of beverage alcohol in the wine, spirits and imported beer categories, with significant market presence in the U.S., Canada, U.K., Australia and New Zealand. Based in Fairport, N.Y., the company has more than 250 brands in its portfolio, sales in approximately 150 countries and operates approximately 60 wineries, distilleries and distribution facilities. It is the largest wine producer in the world; the largest wine company in the U.S. based upon sales dollar value, the largest wine company in the U.K., Australia and Canada; the second largest wine company in New Zealand; the largest beer importer and marketer in the U.S. through its Crown Imports joint venture with Mexico's Grupo Modelo; and the third largest spirits company in the U.S. Constellation Brands is an S&P 500 Index and Fortune 500(R) company. Major brands in the company's portfolio include Corona Extra, Black Velvet Canadian Whisky, the SVEDKA vodka line, Robert Mondavi wines, Ravenswood, Blackstone, Hardys, Banrock Station, Nobilo, Kim Crawford, Inniskillin, Jackson-Triggs and Arbor Mist. 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, as well as all other statements set forth in this news release which are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by the forward-looking statements.

During the current quarter, Constellation may reiterate the estimates set forth above under the heading Outlook and elsewhere in this news release (collectively, the "Projections"). Prior to the start of the company's quiet period, which will begin at the close of business on Nov. 16, 2007, 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.

Commencing at the close of business on Nov. 16, 2007, Constellation will observe a "quiet period" during which the Projections should not be considered to constitute the company's expectations. During the quiet period, the Projections should be considered to be historical, speaking as of prior to the quiet period only and not subject to update by the company.

The company's forward-looking statements 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. Any projections of future results of operations, and in particular, (i) the company's estimated diluted earnings per share on a reported basis for fiscal 2008, and (ii) the company's estimated diluted earnings per share on a comparable basis for fiscal 2008, 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 forward-looking statements of the company contained in this news release are also subject to the following risks and uncertainties: factors relating to Constellation's ability to integrate Vincor's business, and the SVEDKA Vodka business, successfully and realize expected synergies associated with the Vincor acquisition; the continued strength of Vincor's relationships, and relationships of the SVEDKA Vodka business, with their respective employees, suppliers and customers; the accuracy of the bases for forecasts relating to Vincor's business and the SVEDKA Vodka brand and related business; final management determinations and independent appraisals may vary materially from current management estimates of the fair value of assets acquired and liabilities assumed in the SVEDKA Vodka business acquisition; the company's restructuring and related charges, acquisition-related integration costs and purchase accounting adjustments associated with the Vincor integration plan (announced in July 2006) and the company's restructuring and related charges associated with the Fiscal 2007 Wine Plan (announced in August 2006) and its global wine restructuring plan announced in February 2006 may vary materially from management's current estimates of these charges, costs and adjustments due to variations in one or more of anticipated headcount reductions, contract terminations, or costs of implementation of these plans; the company achieving all of the expected cost savings from its Fiscal 2007 Wine Plan, from its Vincor integration plan and from its global wine restructuring plan due to, with respect to any or all of these plans, lower than anticipated reductions in headcount or other expenses, or a delay or greater than anticipated costs in their implementation; the company may realize lower than expected proceeds from sale of assets identified for sale under the Fiscal 2007 Wine Plan and consequently incurs a greater than expected loss on the sale of such assets; the impact upon net sales and diluted earnings per share resulting from the decision to reduce distributor wine inventory levels in the U.S. varying from current expectations due to the actual levels of distributor wine inventory reductions; the company achieving certain sales projections and meeting certain cost targets; wholesalers and retailers may give higher priority to products of the company's competitors; 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 higher than expected selling, general and administrative expenses; a general decline in alcohol consumption; increases in excise and other taxes on beverage alcohol products; governmental bodies may increase tax rates; proportionately, the company's taxable income may be higher than expected in jurisdictions with higher tax rates; and changes in interest rates and foreign currency exchange rates.

The company acquired Vincor International Inc. on June 5, 2006 and the SVEDKA Vodka brand and related business on March 19, 2007. In addition, on Jan. 2, 2007, the company formed the Crown Imports joint venture with Grupo Modelo S.A.B. de C.V. for the purpose of importing and marketing Modelo's Mexican beer portfolio into the United States and Guam, and on April 17, 2007, the company formed the Matthew Clark joint venture with Punch Taverns plc to own and operate the U.K. wholesale business formerly owned entirely by the company. Risks and uncertainties associated with these joint ventures include, among others, each joint venture's ability to operate the business successfully, each joint venture's ability to develop appropriate standards, controls, procedures and policies for the growth and management of such joint venture and the continued strength of each joint venture's relationships with, including without limitation, its employees, suppliers and customers. Additional risks and uncertainties associated with the Matthew Clark joint venture include factors relating to higher than expected formation and/or start-up costs for the joint venture, and the accuracy of the basis for the forecasts relating to the joint venture's business, including any capital investment in distribution infrastructure or the realization of any distribution efficiencies.

For additional information about risks and uncertainties that could adversely affect Constellation's forward-looking statements, please refer to Constellation's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended Feb. 28, 2007, which contains a discussion of additional factors that may affect Constellation's business. The factors discussed in these reports could cause actual future performance to differ from current expectations.



    Constellation Brands, Inc. and Subsidiaries
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in millions)

                                                  August 31,      February 28,
                                                    2007              2007
     Assets

     Current Assets:
        Cash and cash investments                    $33.2             $33.5
        Accounts receivable, net                     784.5             881.0
        Inventories                                1,922.7           1,948.1
        Prepaid expenses and other                   147.0             160.7

           Total current assets                    2,887.4           3,023.3

     Property, plant and equipment, net            1,728.6           1,750.2
     Goodwill                                      3,354.4           3,083.9
     Intangible assets, net                        1,216.4           1,135.4
     Other assets, net                               544.3             445.4

        Total assets                              $9,731.1          $9,438.2

     Liabilities and Stockholders' Equity

     Current Liabilities:
        Notes payable to banks                      $149.8            $153.3
        Current maturities of long-term debt         307.4             317.3
        Accounts payable                             281.3             376.1
        Accrued excise taxes                          72.1              73.7
        Other accrued expenses and
         liabilities                                 641.4             670.7

           Total current liabilities               1,452.0           1,591.1

     Long-term debt, less current maturities       4,291.8           3,714.9
     Deferred income taxes                           473.7             474.1
     Other liabilities                               324.8             240.6

        Total liabilities                          6,542.3           6,020.7

        Total stockholders' equity                 3,188.8           3,417.5

        Total liabilities and stockholders'
         equity                                   $9,731.1          $9,438.2



    Constellation Brands, Inc. and Subsidiaries
    CONSOLIDATED STATEMENTS OF INCOME
    (in millions, except per share data)

                                       Three Months Ended    Six Months Ended
                                        Aug. 31,  Aug. 31,  Aug. 31,  Aug. 31,
                                         2007      2006      2007      2006

     Sales                             $1,167.9  $1,714.9  $2,343.3  $3,145.1
     Excise taxes                        (275.3)   (297.4)   (549.5)   (571.7)
        Net sales                         892.6   1,417.5   1,793.8   2,573.4

     Cost of product sold                (582.9) (1,002.7) (1,215.9) (1,840.0)
        Gross profit                      309.7     414.8     577.9     733.4

     Selling, general and
      administrative expenses            (190.5)   (204.4)   (388.1)   (377.0)
     Acquisition-related integration
      costs                                (1.6)     (7.4)     (3.6)     (8.1)
     Restructuring and related charges     (0.4)    (21.7)     (0.8)    (24.0)
        Operating income                  117.2     181.3     185.4     324.3

     Equity in earnings of equity
      method investees                     80.1       0.2     155.9       0.3
     Interest expense, net                (86.7)    (72.5)   (166.4)   (121.2)
     Gain on change in fair value of
      derivative instrument                  -        2.6     -          55.1
        Income before income taxes        110.6     111.6     174.9     258.5

     Provision for income taxes           (38.5)    (43.2)    (73.0)   (104.6)
        Net income                         72.1      68.4     101.9     153.9

     Dividends on preferred stock            -       (2.4)       -       (4.9)
        Income available to common
         stockholders                     $72.1     $66.0    $101.9    $149.0

     Earnings Per Common Share:
        Basic - Class A Common Stock      $0.34     $0.30     $0.46     $0.67
        Basic - Class B Common Stock      $0.31     $0.27     $0.42     $0.61

        Diluted - Class A Common Stock    $0.33     $0.28     $0.45     $0.64
        Diluted - Class B Common Stock    $0.30     $0.26     $0.41     $0.59

     Weighted Average Common Shares
      Outstanding:
        Basic - Class A Common Stock    191.308   200.316   198.472   199.943
        Basic - Class B Common Stock     23.819    23.845    23.821    23.849

        Diluted - Class A Common Stock  219.300   240.318   226.395   240.052
        Diluted - Class B Common Stock   23.819    23.845    23.821    23.849



    Constellation Brands, Inc. and Subsidiaries
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in millions)

                                                       Six Months Ended
                                                  August 31,        August 31,
                                                    2007               2006
     Cash Flows From Operating Activities
       Net income                                  $101.9             $153.9
       Adjustments to reconcile net income
        to net cash provided by operating
        activities:
          Depreciation of property, plant and
           equipment                                 71.6               58.5
          Stock-based compensation expense           16.9                7.8
          Loss on disposal of business                6.8               17.4
          Amortization of intangible and other
           assets                                     5.4                3.7
          Deferred tax provision                      3.4               31.1
          Equity in earnings of equity method
           investees, net of distributed earnings     2.2                0.2
          Loss on disposal or impairment of
           long-lived assets, net                     0.7                1.4
          Gain on change in fair value of
           derivative instrument                       -               (55.1)
          Non-cash portion of loss on
           extinguishment of debt                      -                11.8
          Change in operating assets and
           liabilities, net of effects from
           purchases and sales of businesses:
             Accounts receivable, net               (56.6)            (152.1)
             Inventories                              1.8               36.0
             Prepaid expenses and other current
              assets                                 (9.0)             (43.1)
             Accounts payable                       (10.7)              55.3
             Accrued excise taxes                    13.1                1.0
             Other accrued expenses and liabilities  61.4              (57.6)
          Other, net                                (31.2)              11.2
               Total adjustments                     75.8              (72.5)
               Net cash provided by operating
                activities                          177.7               81.4

     Cash Flows From Investing Activities
       Purchase of business, net of cash acquired  (386.3)          (1,091.8)
       Purchases of property, plant and equipment   (47.0)            (103.1)
       Payment of accrued earn-out amount            (2.8)              (1.1)
       Investment in equity method investee          (0.6)                -
       Proceeds from formation of joint venture     185.6                 -
       Proceeds from sales of businesses              3.0               28.4
       Proceeds from sales of assets                  2.3                1.2
       Proceeds from maturity of derivative
        instrument                                     -                55.1
       Other investing activities                      -                (0.1)
               Net cash used in investing
                activities                         (245.8)          (1,111.4)

     Cash Flows From Financing Activities
       Proceeds from issuance of long-term debt     716.1            3,695.0
       Exercise of employee stock options            12.5               33.8
       Excess tax benefits from stock-based
        payment awards                                7.4               12.3
       Proceeds from employee stock purchases         3.0                3.2
       Purchases of treasury stock                 (500.0)             (82.0)
       Principal payments of long-term debt        (163.1)          (2,771.5)
       Payment of financing costs of long-
        term debt                                    (6.1)             (19.3)
       Net (repayment of) proceeds from
        notes payable                                (2.1)             212.1
       Payment of preferred stock dividends            -                (4.9)
             Net cash provided by financing
              activities                             67.7            1,078.7

     Effect of exchange rate changes on
      cash and cash investments                       0.1              (17.4)

     Net (decrease) increase in cash and
      cash equivalents                               (0.3)              31.3
     Cash and cash investments, beginning
      of period                                      33.5               10.9
     Cash and cash investments, end of period       $33.2              $42.2



    Constellation Brands, Inc. and Subsidiaries
    SEGMENT INFORMATION
    (in millions)

                             Three Months Ended         Six Months Ended
                         Aug. 31, Aug. 31, Percent  Aug. 31, Aug. 31,  Percent
                           2007    2006    Change    2007       2006   Change

    Segment Net Sales
     and Operating Income
      Constellation Wines
       Branded wine net
        sales             $738.9    $716.5     3%   $1,358.8  $1,233.7    10%
       Wholesale and
        other net sales     48.9     275.8   (82%)     233.3     523.1   (55%)
       Segment net sales  $787.8    $992.3   (21%)  $1,592.1  $1,756.8    (9%)
       Operating income   $124.9    $163.8   (24%)    $211.1    $260.0   (19%)
       % Net sales         15.9%     16.5%             13.3%     14.8%
       Equity in
        earnings of
        equity method
        investees           $1.3      $0.2     NM       $3.7      $0.3     NM

      Constellation Beers
       Segment net sales     $-     $341.6  (100%)       $-     $649.7  (100%)
       Operating income      $-      $73.9  (100%)       $-     $139.0  (100%)
       % Net sales           N/A     21.6%               N/A     21.4%

      Constellation Spirits
       Segment net sales  $104.8     $83.6    25%     $201.7    $166.9    21%
       Operating income    $20.9     $17.7    18%      $36.7     $35.4     4%
       % Net sales         19.9%     21.2%             18.2%     21.2%

      Crown Imports
       Segment net sales  $722.7       $-     N/A   $1,380.8       $-     N/A
       Operating income   $157.3       $-     N/A     $303.6       $-     N/A
       % Net sales         21.8%       N/A             22.0%       N/A

      Consolidation and
       Eliminations
       Segment net sales $(722.7)      $-     N/A  $(1,380.8)      $-     N/A
       Operating income  $(157.3)      $-     N/A    $(303.6)      $-     N/A
       Equity in
        earnings of
        Crown Imports      $78.8       $-     N/A     $152.2       $-     N/A

      Corporate Operations
       and Other
       Consolidated net
        sales             $892.6  $1,417.5   (37%)  $1,793.8  $2,573.4   (30%)
       Operating income   $(20.7)   $(18.0)   15%     $(40.4)   $(32.2)   25%
       % Net sales          2.3%      1.3%              2.3%      1.3%



    Constellation Brands, Inc. and Subsidiaries
    GEOGRAPHIC INFORMATION
    (in millions)

                                  Three Months Ended                 Constant
                                    August   August                  Currency
                                      31,      31,  Percent Currency Percent
                                     2007     2006   Change  Impact  Change(3)
    Geographic Net Sales (1)(2)
        North America               $604.0   $938.1   (36%)     1%    (36%)
        Branded wine                $488.1   $503.9    (3%)     1%     (4%)
        Imported beers                 $-    $341.6  (100%)     -    (100%)
        Spirits                     $104.8    $83.6    25%      -      25%
        Wholesale and other          $11.1     $9.0    23%      4%     19%

        Europe                      $194.4   $390.4   (50%)     4%    (54%)
        Branded wine                $162.8   $129.7    26%      9%     16%
        Wholesale and other          $31.6   $260.7   (88%)     1%    (89%)

        Australia/New Zealand        $94.2    $89.0     6%     13%     (7%)
        Branded wine                 $88.0    $82.9     6%     13%     (7%)
        Wholesale and other           $6.2     $6.1     2%     11%    (10%)



                                                                       Organic
                                                                      Constant
                              Three Months                            Currency
                                 Ended            Acquis- Divest-        Per-
                             August  August Per-  ition   iture   Curr-  cent
                               31,     31,  cent  Impact  Impact  ency  Change
                              2007    2006 Change  (4)     (5)   Impact  (3)
    Branded Wine
     Geographic Net
     Sales (1)(2)
       North America         $488.1  $503.9  (3%)  -       -       1%   (4%)
       Europe                 162.8   129.7  26%   -      11%      9%    4%
       Australia/New Zealand   88.0    82.9   6%   -       -      13%   (7%)
      Consolidated branded
       wine net sales        $738.9  $716.5   3%   -       2%      4%   (3%)



                                    Six Months Ended                 Constant
                                    August   August                  Currency
                                      31,      31,  Percent Currency Percent
                                     2007     2006   Change  Impact  Change(3)
    Geographic Net Sales (1)(2)
        North America             $1,110.2  $1,683.3   (34%)   -      (34%)
        Branded wine                $881.5    $851.6     4%    1%       3%
        Imported beers                  $-     $649.7 (100%)   -     (100%)
        Spirits                     $201.7    $166.9    21%    -       21%
        Wholesale and other          $27.0     $15.1    79%    3%      76%

        Europe                      $496.6    $719.8   (31%)   6%     (37%)
        Branded wine                $306.1    $226.0    35%   10%      25%
        Wholesale and other         $190.5    $493.8   (61%)   3%     (65%)

        Australia/New Zealand       $187.0    $170.3    10%   11%      (2%)
        Branded wine                $171.2    $156.1    10%   11%      (2%)
        Wholesale and other          $15.8     $14.2    11%   11%       -



                                                                      Organic
                                                                      Constant
                              Six Months                              Currency
                                 Ended            Acquis- Divest-        Per-
                             August  August Per-  ition   iture   Curr-  cent
                               31,     31,  cent  Impact  Impact  ency  Change
                              2007    2006 Change  (4)     (5)   Impact  (3)
    Branded Wine
     Geographic
     Net Sales (1)(2)
       North America         $881.5   $851.6   4%   10%     -      1%    (8%)
       Europe                 306.1    226.0  35%   12%    10%    10%     4%
       Australia/New
        Zealand               171.2    156.1  10%    7%     -     11%    (9%)
      Consolidated branded
       wine net sales      $1,358.8 $1,233.7  10%   10%     2%     4%    (5%)

    (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) Acquisition impact includes net sales of branded wine acquired in the
        acquisition of Vincor International Inc. ("Vincor") for the period
        March 1, 2007, through May 31, 2007, included in the six months ended
        August 31, 2007.

    (5) Divestiture impact includes the add-back of U.K. branded wine net
        sales previously sold through the U.K. wholesale business for the
        three months and six months ended August 31, 2006.



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

As the Company acquired Vincor on June 5, 2006, formed its imported beer joint venture on January 2, 2007, acquired Svedka on March 19, 2007, and formed its U.K. wholesale joint venture on April 17, 2007, organic net sales for the respective periods are defined by the Company as reported net sales less net sales of Vincor products, net sales of imported beers, net sales of Svedka products, or net sales of U.K. wholesale, plus net sales of U.K. branded wine, 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.


                                  Three Months Ended                Constant
                                   August   August                  Currency
                                     31,      31,  Percent Currency Percent
                                    2007     2006   Change  Impact  Change(1)
    Consolidated Net Sales
       Branded wine                 $738.9   $716.5     3%    4%      (1%)
       Wholesale and other            48.9    275.8   (82%)   1%     (84%)
       Imported beers                   -     341.6  (100%)   -     (100%)
       Spirits                       104.8     83.6    25%    -       25%
         Consolidated reported
          net sales                  892.6  1,417.5   (37%)   2%     (39%)
       Less:  Vincor (2)                -        -
       Less:  Imported beers (3)        -    (341.6)
       Less:  Svedka (4)             (11.8)      -
       Less:  U.K. wholesale, net
        of U.K. branded wine (5)        -    (215.4)
          Consolidated organic
           net sales                $880.8   $860.5     2%    4%      (1%)

    Branded Wine Net Sales
       Branded wine reported
        net sales                   $738.9   $716.5     3%    4%      (1%)
       Less:  Vincor (2)                -        -
       Plus:  U.K. branded wine (5)     -      14.5
          Branded wine organic
           net sales                $738.9   $731.0     1%    4%      (3%)

    Spirits Net Sales
       Spirits reported net sales   $104.8    $83.6    25%    -       25%
       Less:  Svedka (4)             (11.8)   -
          Spirits organic net sales  $93.0    $83.6    11%    -       11%

    Wholesale and Other Net Sales
       Wholesale and other reported
        net sales                    $48.9   $275.8   (82%)   1%     (84%)
       Less:  Vincor (2)                -        -
       Less:  U.K. wholesale (5)        -    (229.9)
          Wholesale and other
           organic net sales         $48.9    $45.9     7%    7%      (1%)



                                  Six Months Ended                  Constant
                                   August   August                  Currency
                                     31,      31,  Percent Currency Percent
                                    2007     2006   Change  Impact  Change(1)
    Consolidated Net Sales
       Branded wine               $1,358.8  $1,233.7    10%    4%       6%
       Wholesale and other           233.3     523.1   (55%)   4%     (59%)
       Imported beers                   -      649.7  (100%)   -     (100%)
       Spirits                       201.7     166.9    21%    -       21%
          Consolidated reported
           net sales               1,793.8   2,573.4   (30%)   2%     (33%)
       Less:  Vincor (2)            (133.7)       -
       Less:  Imported beers (3)        -     (649.7)
       Less:  Svedka (4)             (23.4)       -
       Less:  U.K. wholesale, net
        of U.K. branded wine (5)        -     (313.3)
          Consolidated organic
           net sales              $1,636.7  $1,610.4     2%    4%      (2%)

    Branded Wine Net Sales
       Branded wine reported
        net sales                 $1,358.8  $1,233.7    10%    4%       6%
       Less:  Vincor (2)            (126.3)       -
       Plus:  U.K. branded
        wine (5)                        -       21.6
          Branded wine organic
           net sales              $1,232.5  $1,255.3    (2%)   4%      (5%)

    Spirits Net Sales
       Spirits reported net sales   $201.7    $166.9    21%    -       21%
       Less:  Svedka (4)             (23.4)       -
          Spirits organic net sales $178.3    $166.9     7%    -        7%

    Wholesale and Other Net Sales
       Wholesale and other reported
        net sales                   $233.3    $523.1   (55%)   4%     (59%)
       Less:  Vincor (2)              (7.4)       -
       Less:  U.K. wholesale (5)        -     (334.9)
          Wholesale and other
           organic net sales        $225.9    $188.2    20%   10%      10%

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

    (2) For the period March 1, 2007, through May 31, 2007, included in the
        six months ended August 31, 2007.

    (3) For the three months and six months ended August 31, 2006.

    (4) For the three months ended August 31, 2007, and for the period March
        19, 2007, through August 31, 2007, included in the six months ended
        August 31, 2007.

    (5) Amount includes net sales of U.K. wholesale business, net of U.K.
        branded wine net sales previously sold through the U.K. wholesale
        business, for the three months ended August 31, 2006, and for the
        period April 17, 2006, through August 31, 2006, included in the six
        months ended August 31, 2006.



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

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 reconciliations below, 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 below for supplemental financial data and corresponding reconciliations of these non-GAAP financial measures to GAAP financial measures for the three months ended August 31, 2007, and August 31, 2006. 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.


                                      Three Months Ended August 31, 2007

                                                    Strategic
                                 Reported           Business        Comparable
                                  Basis  Inventory  Realign-           Basis
                                  (GAAP)   Step-up  ment(1) Other(2)(Non-GAAP)

     Net Sales                     $892.6                              $892.6
       Cost of product sold        (582.9)     2.3      2.1      0.1   (578.4)
     Gross Profit                   309.7      2.3      2.1      0.1    314.2
        Selling, general and
         administrative expenses
         ("SG&A")                  (190.5)              1.4            (189.1)
        Acquisition-related
         integration costs           (1.6)              1.6                -
        Restructuring and related
         charges                     (0.4)              0.4                -
     Operating Income               117.2      2.3      5.5      0.1    125.1
        Equity in earnings of
         equity method investees     80.1      0.1                       80.2
     EBIT                                                               205.3
        Interest expense, net       (86.7)                              (86.7)
        Gain on change in fair
         value of derivative
         instrument                    -                                   -
     Income Before Income Taxes     110.6      2.4      5.5      0.1    118.6
        Provision for income taxes  (38.5)    (0.9)    (1.7)    (0.1)   (41.2)
     Net Income                     $72.1     $1.5     $3.8      $-     $77.4
     Diluted Earnings Per Common
      Share(3)                      $0.33    $0.01    $0.02      $-     $0.35
     Weighted Average Common
      Shares Outstanding -
      Diluted                     219.300  219.300  219.300  219.300  219.300

     Gross Margin                   34.7%                               35.2%
     SG&A as a percent of net
      sales                         21.3%                               21.2%
     Operating Margin               13.1%                               14.0%
     Effective Tax Rate             34.8%                               34.7%


                                     Three Months Ended August 31, 2006

                                                    Strategic
                                 Reported           Business        Comparable
                                  Basis  Inventory  Realign-           Basis
                                  (GAAP)   Step-up  ment(1) Other(2)(Non-GAAP)

     Net Sales                  $1,417.5                             $1,417.5
        Cost of product sold    (1,002.7)     5.9      1.3      0.9    (994.6)
     Gross Profit                  414.8      5.9      1.3      0.9     422.9
        Selling, general and
         administrative expenses
         ("SG&A")                 (204.4)              1.7     17.2    (185.5)
        Acquisition-related
         integration costs          (7.4)              7.4                 -
        Restructuring and related
         charges                   (21.7)             21.7                 -
     Operating Income              181.3      5.9     32.1     18.1     237.4
        Equity in earnings of
         equity method investees     0.2      0.4                         0.6
     EBIT                                                               238.0
        Interest expense, net      (72.5)                               (72.5)
        Gain on change in fair
         value of derivative
         instrument                  2.6                       (2.6)       -
     Income Before Income Taxes    111.6      6.3     32.1     15.5     165.5
        Provision for income
         taxes                     (43.2)    (2.3)    (9.8)    (5.7)    (61.0)
     Net Income                    $68.4     $4.0    $22.3     $9.8    $104.5
     Diluted Earnings Per
      Common Share(3)              $0.28    $0.02    $0.09    $0.04     $0.43
     Weighted Average Common
      Shares Outstanding
      - Diluted                  240.318  240.318  240.318  240.318   240.318

     Gross Margin                  29.3%                                29.8%
     SG&A as a percent of net
      sales                        14.4%                                13.1%
     Operating Margin              12.8%                                16.7%
     Effective Tax Rate            38.7%                                36.9%


                                                      Percent        Percent
                                                      Change -       Change -
                                                      Reported      Comparable
                                                       Basis          Basis
                                                       (GAAP)       (Non-GAAP)

     Net Sales                                         (37%)          (37%)
        Cost of product sold                           (42%)          (42%)
     Gross Profit                                      (25%)          (26%)
        Selling, general and administrative
         expenses ("SG&A")                              (7%)            2%
        Acquisition-related integration costs          (78%)           N/A
        Restructuring and related charges              (98%)           N/A
     Operating Income                                  (35%)          (47%)
        Equity in earnings of equity method
         investees                                       NM             NM
     EBIT                                               N/A           (14%)
        Interest expense, net                           20%            20%
        Gain on change in fair value of
         derivative instrument                        (100%)           N/A
     Income Before Income Taxes                         (1%)          (28%)
        Provision for income taxes                     (11%)          (32%)
     Net Income                                          5%           (26%)
     Diluted Earnings Per Common Share(3)               18%           (19%)
     Weighted Average Common Shares
      Outstanding - Diluted

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

    (1) For the three months ended August 31, 2007, strategic business
        realignment items include the loss on disposal in connection with the
        company's contribution of its U.K. wholesale business of $0.5 million,
        and costs recognized by the company primarily in connection with (i)
        its plan 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") of $1.4 million, net of a
        tax benefit of $0.6 million, (ii)  the restructuring and integration
        of the operations of Vincor International Inc. (the "Vincor Plan") of
        $1.1 million, net of a tax benefit of $0.6 million, (iii)  its
        worldwide wine reorganization, including its program to consolidate
        certain west coast production processes in the U.S. (collectively, the
        "Fiscal 2006 Plan") of $0.7 million, net of a tax benefit of $0.4
        million, and (iv)  the restructuring and integration of the operations
        of The Robert Mondavi Corporation (the "Robert Mondavi Plan") of $0.1
        million, net of a tax benefit of $0.1 million.  For the three months
        ended August 31, 2006, strategic business realignment items include
        costs recognized by the company in connection with (i)  Fiscal 2007
        Wine Plan of $14.3 million, net of a tax benefit of $5.3 million, (ii)
        the Vincor Plan of $5.5 million, net of a tax benefit of $3.2 million,
        (iii)  the Fiscal 2006 Plan of $2.4 million, net of a tax benefit of
        $1.3 million, and (iv)  additional loss on the sale of the company's
        branded bottled water business of $0.1 million.

    (2) For the three months ended August 31, 2007, other includes $0.0
        million, net of a tax benefit of $0.1 million, of adverse grape costs
        recognized in connection with the acquisition of The Robert Mondavi
        Corporation.  For the three months ended August 31, 2006, other
        includes (i)  $0.6 million, net of a tax benefit of $0.3 million, of
        adverse grape costs recognized in connection with the acquisition of
        The Robert Mondavi Corporation, (ii)  the write-off of deferred
        financing fees of $7.4 million, net of a tax benefit of $4.4 million,
        in connection with the company's repayment of its prior senior credit
        facility, (iii)  foreign currency losses of $3.4 million, net of a tax
        benefit of $2.0 million, on foreign denominated intercompany loan
        balances associated with the acquisition of Vincor International Inc.
        ("Vincor"), and (iv)  a gain of $1.6 million, net of tax expense of
        $1.0 million, on the mark-to-market adjustment of the foreign currency
        forward contract entered into by the company in connection with the
        acquisition of Vincor to fix the U.S. dollar cost of the acquisition
        and payment of certain outstanding indebtedness.

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



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

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 reconciliations below, 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 below for supplemental financial data and corresponding reconciliations of these non-GAAP financial measures to GAAP financial measures for the six months ended August 31, 2007, and August 31, 2006. 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.


                                      Six Months Ended August 31, 2007

                                                    Strategic
                                 Reported           Business        Comparable
                                  Basis  Inventory  Realign-           Basis
                                  (GAAP)   Step-up  ment(1) Other(2)(Non-GAAP)

     Net Sales                  $1,793.8                             $1,793.8
        Cost of product sold    (1,215.9)     5.2      4.3      0.1  (1,206.3)
     Gross Profit                  577.9      5.2      4.3      0.1     587.5
        Selling, general and
         administrative expenses  (388.1)              8.0             (380.1)
        Acquisition-related
         integration costs          (3.6)              3.6                 -
        Restructuring and related
         charges                    (0.8)              0.8                 -
     Operating Income              185.4      5.2     16.7      0.1     207.4
        Equity in earnings of
         equity method investees   155.9      0.3                       156.2
     EBIT                                                               363.6
        Interest expense, net     (166.4)                              (166.4)
        Gain on change in fair
         value of derivative
         instrument                   -                                    -
     Income Before Income Taxes    174.9      5.5     16.7      0.1     197.2
        Provision for income taxes (73.0)    (2.0)     3.8     (0.1)    (71.3)
     Net Income                   $101.9     $3.5    $20.5      $-     $125.9
     Diluted Earnings Per
      Common Share(3)              $0.45    $0.02    $0.09      $-      $0.56
     Weighted Average Common
      Shares Outstanding
      - Diluted                  226.395  226.395  226.395  226.395   226.395

     Gross Margin                  32.2%                                32.8%
     SG&A as a percent of net
      sales                        21.6%                                21.2%
     Operating Margin              10.3%                                11.6%
     Effective Tax Rate            41.7%                                36.2%


                                      Six Months Ended August 31, 2006

                                                    Strategic
                                 Reported           Business        Comparable
                                  Basis  Inventory  Realign-           Basis
                                  (GAAP)   Step-up  ment(1) Other(2)(Non-GAAP)

     Net Sales                  $2,573.4                             $2,573.4
        Cost of product sold    (1,840.0)     6.5      2.4      2.4  (1,828.7)
     Gross Profit                  733.4      6.5      2.4      2.4     744.7
        Selling, general and
         administrative expenses  (377.0)             17.3     17.2    (342.5)
        Acquisition-related
         integration costs          (8.1)              8.1                 -
        Restructuring and related
         charges                   (24.0)             24.0                 -
     Operating Income              324.3      6.5     51.8     19.6     402.2
        Equity in earnings of
         equity method investees     0.3      0.9                         1.2
     EBIT                                                               403.4
        Interest expense, net     (121.2)                              (121.2)
        Gain on change in fair
         value of derivative
         instrument                 55.1                      (55.1)       -
     Income Before Income Taxes    258.5      7.4     51.8    (35.5)    282.2
        Provision for income
         taxes                    (104.6)    (2.6)    (8.6)    12.8    (103.0)
     Net Income                   $153.9     $4.8    $43.2   $(22.7)   $179.2
     Diluted Earnings Per
      Common Share(3)              $0.64    $0.02    $0.18   $(0.09)    $0.75
     Weighted Average Common
      Shares Outstanding
      - Diluted                  240.052  240.052  240.052  240.052   240.052

     Gross Margin                  28.5%                                28.9%
     SG&A as a percent of net
      sales                        14.6%                                13.3%
     Operating Margin              12.6%                                15.6%
     Effective Tax Rate            40.5%                                36.5%


                                                     Percent         Percent
                                                     Change -        Change -
                                                     Reported       Comparable
                                                      Basis           Basis
                                                      (GAAP)        (Non-GAAP)

     Net Sales                                         (30%)             (30%)
        Cost of product sold                           (34%)             (34%)
     Gross Profit                                      (21%)             (21%)
        Selling, general and administrative
         expenses                                        3%               11%
        Acquisition-related integration costs          (56%)              N/A
        Restructuring and related charges              (97%)              N/A
     Operating Income                                  (43%)             (48%)
        Equity in earnings of equity method
         investees                                       NM                NM
     EBIT                                               N/A              (10%)
        Interest expense, net                           37%               37%
        Gain on change in fair value of
         derivative instrument                        (100%)              N/A
     Income Before Income Taxes                        (32%)             (30%)
        Provision for income taxes                     (30%)             (31%)
     Net Income                                        (34%)             (30%)
     Diluted Earnings Per Common Share(3)              (30%)             (25%)
     Weighted Average Common Shares
      Outstanding - Diluted

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


    (1) For the six months ended August 31, 2007, strategic business
        realignment items include the loss on disposal in connection with the
        company's contribution of its U.K. wholesale business of $13.8
        million, including $7.2 million additional tax expense, and costs
        recognized by the company primarily in connection with (i) the Fiscal
        2007 Wine Plan of $2.5 million, net of a tax benefit of $1.1 million,
        (ii) the Vincor Plan of $2.4 million, net of a tax benefit of $1.2
        million, (iii) the Fiscal 2006 Plan of $1.6 million, net of a tax
        benefit of $1.0 million, and (iv) the Robert Mondavi Plan of $0.2
        million, net of a tax benefit of $0.1 million. For the six months
        ended August 31, 2006, strategic business realignment items consist
        primarily of costs recognized by the company in connection with (i)
        the Fiscal 2007 Wine Plan of $14.3 million, net of a tax benefit of
        $5.3 million, (ii) the Vincor Plan of $5.5 million, net of a tax
        benefit of $3.2 million, (iii) the Fiscal 2006 Plan of $5.6 million,
        net of a tax benefit of $3.0 million, (iv)  the Robert Mondavi Plan of
        $0.4 million, net of a tax benefit of $0.3 million, and (v) the loss
        on the sale of the company's branded bottled water business of $17.4
        million, including $3.2 million additional tax expense.

    (2) For the six months ended August 31, 2007, other includes $0.0 million,
        net of a tax benefit of $0.1 million, of adverse grape costs
        recognized in connection with the acquisition of The Robert Mondavi
        Corporation. For the six months ended August 31, 2006, other includes
        (i) a gain of $35.1 million, net of tax expense of $20.0 million, on
        the mark-to- market adjustment of the foreign currency forward
        contract entered into by the company in connection with the
        acquisition of Vincor to fix the U.S. dollar cost of the acquisition
        and payment of certain outstanding indebtedness, (ii) the write-off of
        deferred financing fees of $7.4 million, net of a tax benefit of $4.4
        million, in connection with the company's repayment of its prior
        senior credit facility, and (iii) foreign currency losses of $3.4
        million, net of a tax benefit of $2.0 million, on foreign denominated
        intercompany loan balances associated with the acquisition of Vincor
        International Inc. ("Vincor").

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



    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
                                                     Ending February 29, 2008
    Diluted Earnings Per Share Guidance

    Forecasted diluted earnings per share
     - reported basis (GAAP)                         $1.20             $1.28
         Inventory step-up                            0.03              0.03
         Strategic business realignment(1)            0.11              0.11
    Forecasted diluted earnings per share
     - comparable basis (Non-GAAP)(2)                $1.34             $1.42



                                                             Actual for the
                                                               Year Ended
                                                           February 28, 2007

    Diluted earnings per share - reported basis (GAAP)           $1.38
         Mondavi adverse grape cost                               0.01
         Inventory step-up                                        0.09
         Strategic business realignment(1)                        0.30
         Other(3)                                                (0.10)
    Diluted earnings per share -
     comparable basis (Non-GAAP)(2)                              $1.68


    (1) Includes $0.05, $0.03, $0.02 and $0.01 diluted earnings per share for
        the year ending February 29, 2008, associated with the loss on
        disposal in connection with the company's contribution of its U.K.
        wholesale business to the Matthew Clark joint venture and the
        company's provision for income taxes in connection with the
        repatriation of proceeds associated with this transaction, the Fiscal
        2007 Wine Plan, the Vincor Plan and the Fiscal 2006 Plan,
        respectively.  Includes $0.13, $0.07 and $0.03 diluted earnings per
        share for the year ended February 28, 2007, associated with the
        company's Fiscal 2007 Wine Plan, Vincor Plan and Fiscal 2006 Plan,
        respectively, and $0.07 diluted earnings per share associated with the
        loss on the sale of the company's branded bottled water business for
        the year ended February 28, 2007.(2)

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

    (3) Includes ($0.15), $0.03 and $0.01 diluted earnings per share for the
        year ended February 28, 2007, associated with the gain on the mark-to-
        market adjustment of the foreign currency forward contract entered
        into by the company in connection with the acquisition of Vincor to
        fix the U.S. dollar cost of the acquisition and payment of certain
        outstanding indebtedness, the write-off of deferred financing fees in
        connection with the company's repayment of its prior senior credit
        facility, and foreign currency losses on foreign denominated
        intercompany loan balances associated with the acquisition of Vincor,
        respectively.(2)


    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 29, 2008

    Net cash provided by operating
     activities (GAAP)                         $325.0            $345.0
         Purchases of property, plant and
          equipment                            (165.0)           (165.0)
    Free cash flow (Non-GAAP)                  $160.0            $180.0


                                        Actual for the Six  Actual for the Six
                                           Months Ended        Months Ended
                                          August 31, 2007     August 31, 2006

    Net cash provided by operating
     activities (GAAP)                         $177.7             $81.4
      Purchases of property, plant and
       equipment                                (47.0)           (103.1)
    Free cash flow (Non-GAAP)                  $130.7            $(21.7)

 SOURCE  Constellation Brands, Inc.     -0-                             10/04/2007     /CONTACT:  Media, Mike Martin, +1-585-218-3669, or Angie Blackwell, +1-585-218-3842; or Investor Relations, Patty Yahn-Urlaub, +1-585-218-3838, or Bob Czudak, +1-585-218-3668, all of Constellation Brands, Inc./