Constellation Brands' Second Quarter Net Sales Top $1 Billion; Company Reports Second Quarter Results In Line With Expectations

FINANCIAL HIGHLIGHTS

  • First-ever quarter of net sales above $1 billion
  • Growth in all categories: net sales up 14% from prior year
  • Reported net income up 127% to $80.6 million
  • Reported diluted EPS doubled from prior year to $0.69
  • Comparable basis net income up 24% to $82.0 million
  • Comparable basis diluted EPS up 11% to $0.71
  • Net sales for beers and spirits segment up 14%
  • Net sales for wines segment up 14%
  • Company affirms full year diluted EPS guidance

FAIRPORT, N.Y., Sept. 30 /PRNewswire-FirstCall/ -- Constellation Brands, Inc. (NYSE: STZ; ASX: CBR), a leading international producer and marketer of beverage alcohol brands, reported record net sales for its second quarter ended Aug. 31, 2004, topping $1 billion for the first time in any quarter since the company was founded in 1945. Net sales increased 14 percent, driven by growth across the company's businesses of imported beers, spirits, branded wine and its U.K. wholesale business. Currency contributed five percent of the increase.

"We're pleased with the vibrancy of our beverage alcohol business' organic growth, and we're particularly happy about the performance of brands receiving incremental marketing investment in fiscal 2005, including Alice White, Ravenswood, Hardys and Blackstone wines, as well as our strong Corona beer results," stated Richard Sands, Constellation Brands chairman and chief executive officer. "Fourteen percent growth for our beers and spirits segment was driven by continued strong consumer demand for our entire Mexican beer portfolio. Our wines segment also grew 14 percent, with approximately half of that growth coming from additional distribution and sales of the brands we're supporting with incremental dollars. We're committed to growing our brands."

Constellation's reported net income increased 127 percent for the second quarter, to $80.6 million, and reported diluted earnings per share doubled to $0.69. Second quarter 2005 and 2004 reported results include restructuring and related charges and net unusual costs of $1.4 million after tax, or $0.02 per share, and $30.8 million after tax, or $0.30 per share, respectively. Net income, on a comparable basis excluding the restructuring and related charges and net unusual costs, increased 24 percent, to $82.0 million, and comparable diluted earnings per share increased 11 percent to $0.71. Diluted earnings per share growth was impacted by additional shares outstanding, primarily as a result of the company's equity offerings in July 2003, the proceeds of which were used to pay down debt incurred to partially finance the Hardy acquisition.

Constellation Beers and Spirits Results

Net sales for the quarter grew 14 percent to reach $365.2 million on strong beer and spirits growth. Beers net sales increased 17 percent driven by volume and the March 2004 price increase for the Mexican beer portfolio, including Corona Extra, Corona Light, Modelo Especial, Negra Modelo and Pacifico. Additional marketing support also contributed to the growth of the Mexican portfolio.

Spirits net sales increased five percent on a two percent rise in branded spirits and strong growth in production services. Skol and Fleischmann's Vodkas, the 99 cordials line and Black Velvet Canadian Whisky were among the brands that contributed to the increase in branded spirits sales.

Operating income for Constellation Beers and Spirits grew 20 percent to reach $83.8 million for the second quarter, due primarily to higher net sales.

Constellation Wines Results

Net sales for the quarter grew 14 percent, to $671.7 million, driven by growth in branded wine net sales and the U.K. wholesale business, as well as a seven percent favorable impact from currency.

Branded wine net sales increased eight percent, to reach $413.6 million, driven by volume growth and a four percent benefit from currency. The company's Australian wine portfolio grew in all of the key markets - U.S., U.K. and Australia. Branded wine net sales in Australia grew 18 percent including an eight percent benefit from currency, with strong volume gains from Banrock Station, Hardys, Renmano and Stanley.

Branded wine net sales in Europe grew 25 percent, including a 14 percent benefit from currency, with volume gains from Banrock Station, Hardys and Stowells. The demand for Australian wine continues to increase throughout the continent and Constellation continues to benefit from this trend.

Branded wine net sales in the U.S. declined two percent as year ago net sales benefited from the launch of new products. Excluding the impact of these new product introductions, U.S. branded wine net sales increased three percent year-over-year as the company continues to benefit from greater consumer demand for premium brands including Ravenswood, Simi and Franciscan Oakville Estate.

Wholesale and other net sales increased 25 percent driven by strong U.K. wholesale volume and a 13 percent benefit from currency.

Operating income for Constellation Wines for the second quarter increased slightly to reach $87.7 million. Operating margins declined on a percentage basis for the quarter due primarily to a change in the sales mix, with a significant increase in net sales coming from the U.K. wholesale business and lower margin wine products.

2004 California Wine Grape Harvest

"Wine grape growing conditions in California over the past year have contributed to this year's early harvest and lighter volume. We believe that this is likely to result in spot prices firming, which should be good for the industry," explained Sands. "This year's California harvest is yielding a quality wine grape crop, and we believe our consumers will experience an excellent vintage. Overall, we feel very good about the 2004 U.S. wine grape harvest." Summary

"Our business is robust," said Sands. "By making incremental investments to leverage the power of our extensive beverage alcohol portfolio, we are focusing our core competencies on goals to gain distribution and strengthen our competitive position while capitalizing on consumer-driven consumption trends."

About Constellation

Constellation Brands, Inc. is a leading international producer and marketer of beverage alcohol brands with a broad portfolio across the wine, spirits and imported beer categories. Well-known brands in Constellation's portfolio include: Corona Extra, Pacifico, St. Pauli Girl, Black Velvet, Fleischmann's, Mr. Boston, Paul Masson Grande Amber Brandy, Franciscan Oakville Estate, Estancia, Simi, Ravenswood, Blackstone, Banrock Station, Hardys, Nobilo, Alice White, Vendange, Almaden, Arbor Mist, Stowells and Blackthorn.

Quarterly Conference Call

A conference call to discuss second quarter fiscal 2005 results will be hosted by Chairman and Chief Executive Officer Richard Sands and Executive Vice President and Chief Financial Officer Tom Summer on Thursday, Sept. 30, 2004 at 5:00 p.m. (Eastern). The conference call can be accessed by dialing +412-858-4600 beginning 10 minutes prior to the start of the call. A live listen-only web cast of the conference call, together with a copy of this press release (including the attachments) and other financial information that may be discussed in the call are available on the Internet at Constellation's web site: http://www.cbrands.com under "Investors."

Explanations

Net income and diluted earnings per share on a comparable basis exclude restructuring and related charges and net unusual costs. The company discusses results on a comparable basis in order to give investors better insight on underlying business trends from continuing operations. A table reconciling these measures, as well as other related financial measures to reported results, is included in this release. For a detailed discussion of these items, please see the section "Items Affecting Comparability" following the financial statements. The company's measure of segment profitability excludes restructuring and related charges and net unusual costs, which is consistent with the measure used by management to evaluate results. Outlook

The following table sets forth management's current diluted earnings per share expectations both on a reported basis and comparable basis for the third quarter ending Nov. 30, 2004 and fiscal year ending Feb. 28, 2005. The table also includes actual diluted earnings per share both on a reported basis and comparable basis for the same periods a year ago. A reconciliation of reported information to comparable information is included in this media release.


           Constellation Brands Third Quarter and Fiscal Year 2005
                      Diluted Earnings Per Share Outlook


                             Reported Basis             Comparable Basis
                            FY05        FY04           FY05           FY04
                          Estimate     Actual        Estimate        Actual

    Third Quarter
     Ending Nov. 30    $0.80 - $0.84    $0.73      $0.82 - $0.86     $0.80

    Full Year Ending
     Feb. 28/29        $2.50 - $2.55    $2.06      $2.62 - $2.67     $2.49

FORWARD-LOOKING STATEMENTS

The statements made under the heading Outlook (collectively, the "Outlook"), as well as all other statements set forth in this press 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 quarter, Constellation may reiterate the estimates set forth above under the heading Outlook. Prior to the start of the company's quiet period, beginning Nov. 17, the public can continue to rely on the Outlook as still being Constellation's current expectations on the matters covered, unless Constellation publishes a notice stating otherwise.

Beginning Nov. 17, 2004, Constellation will observe a "quiet period" during which the Outlook no longer constitutes the company's current expectations. During the quiet period, the Outlook 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 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 third quarter 2005 and fiscal 2005, and (ii) the company's estimated diluted earnings per share on a comparable basis for third quarter 2005 and fiscal 2005, 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 press release are also subject to the following risks and uncertainties: 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; and changes in foreign currency exchange rates. For additional information about risks and uncertainties that could adversely affect the company's forward-looking statements, please refer to the company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended Feb. 29, 2004.



                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

                                            August 31, 2004  February 29, 2004
    ASSETS
    CURRENT ASSETS:
      Cash and cash investments                   $9,768           $37,136
      Accounts receivable, net                   789,081           635,910
      Inventories, net                         1,318,748         1,261,378
      Prepaid expenses and other                 176,999           137,047
        Total current assets                   2,294,596         2,071,471
    PROPERTY, PLANT AND EQUIPMENT, net         1,061,278         1,097,362
    GOODWILL                                   1,491,925         1,540,637
    INTANGIBLE ASSETS, net                       720,037           744,978
    OTHER ASSETS                                  87,814           104,225
      Total assets                            $5,655,650        $5,558,673

    LIABILITIES AND STOCKHOLDERS' EQUITY
    CURRENT LIABILITIES:
      Notes payable to banks                    $193,596            $1,792
      Current maturities of long-term debt        79,343           267,245
      Accounts payable                           403,073           270,291
      Accrued excise taxes                        69,598            48,465
      Other accrued expenses and liabilities     457,658           442,009
        Total current liabilities              1,203,268         1,029,802
    LONG-TERM DEBT, less current
     maturities                                1,720,588         1,778,853
    DEFERRED INCOME TAXES                        197,835           187,410
    OTHER LIABILITIES                            152,790           184,989
    STOCKHOLDERS' EQUITY                       2,381,169         2,377,619
      Total liabilities and stockholders'
       equity                                 $5,655,650        $5,558,673



                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                               ON A REPORTED BASIS
                      (in thousands, except per share data)

                                     For the Three   For the Three
                                      Months Ended    Months Ended
                                        August 31,     August 31,   Percent
                                          2004           2003        Change

     Sales                             $1,300,242      $1,150,517      13%
     Excise taxes                        (263,301)       (239,453)     10%
       Net sales                        1,036,941         911,064      14%
     Cost of product sold                (747,258)       (670,532)     11%
       Gross profit                       289,683         240,532      20%
     Selling, general and administrative
      expenses                           (132,355)       (127,293)      4%
     Restructuring and related charges     (1,169)        (17,083)    -93%
       Operating income                   156,159          96,156      62%
     Gain on change in fair value of
      derivative instruments                   --              --     N/A
     Equity in earnings of equity method
      investees                               200             511     -61%
     Interest expense, net                (30,400)        (41,098)    -26%
     Income before income taxes           125,959          55,569     127%
     Provision for income taxes           (45,345)        (20,005)    127%
       Net income                          80,614          35,564     127%
     Dividends on preferred stock          (2,451)           (844)    190%
       Income available to common
        stockholders                      $78,163         $34,720     125%



     Earnings per common share:
       Basic - Class A Common Stock         $0.73           $0.36     103%
       Basic - Class B Common Stock         $0.67           $0.32     109%
       Diluted                              $0.69           $0.34     103%

     Weighted average common shares
      outstanding:
       Basic - Class A Common Stock        95,451          86,502      10%
       Basic - Class B Common Stock        12,049          12,070       0%
       Diluted                            116,147         104,131      12%

     Segment Information:
     Net sales:
       Constellation Beers and Spirits
         Imported beers                  $289,137        $247,414      17%
         Spirits                           76,080          72,504       5%
           Net sales                     $365,217        $319,918      14%
       Constellation Wines
         Branded wine                    $413,563        $383,885       8%
         Wholesale and other              258,161         207,261      25%
           Net sales                     $671,724        $591,146      14%
     Consolidated net sales            $1,036,941        $911,064      14%

     Operating income:
       Constellation Beers and Spirits    $83,811         $70,117      20%
       Constellation Wines                 87,745          84,413       4%
       Corporate Operations and Other     (13,256)        (10,238)     29%
       Restructuring and related charges
        and unusual costs (a)              (2,141)        (48,136)    -96%
     Consolidated operating income       $156,159         $96,156      62%


     (a) Restructuring and related charges and unusual costs for Second
         Quarter 2005 include restructuring and related charges of $1,169, and
         the flow through of inventory step-up associated with the Hardy
         acquisition of $972. Restructuring and related charges and unusual
         costs for Second Quarter 2004 include the flow through of inventory
         step-up associated with the Hardy acquisition of $9,017, financing
         costs of $5,209 and restructuring and related charges of $33,910.


                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                               ON A REPORTED BASIS
                      (in thousands, except per share data)

                                       For the Six     For the Six
                                      Months Ended    Months Ended
                                        August 31,     August 31,   Percent
                                          2004           2003        Change

     Sales                             $2,474,557      $2,140,757      16%
     Excise taxes                        (510,311)       (456,891)     12%
       Net sales                        1,964,246       1,683,866      17%
     Cost of product sold              (1,424,101)     (1,234,249)     15%
       Gross profit                       540,145         449,617      20%
     Selling, general and
      administrative expenses            (270,783)       (235,095)     15%
     Restructuring and related charges     (2,782)        (19,399)    -86%
       Operating income                   266,580         195,123      37%
     Gain on change in fair value of
      derivative instruments                   --           1,181    -100%
     Equity in earnings of equity method
      investees                               262             839     -69%
     Interest expense, net                (60,681)        (80,341)    -24%
       Income before income taxes         206,161         116,802      77%
     Provision for income taxes           (74,218)        (42,049)     77%
       Net income                         131,943          74,753      77%
     Dividends on preferred stock          (4,902)           (844)    481%
       Income available to common
        stockholders                     $127,041         $73,909      72%


     Earnings per common share:
       Basic - Class A Common Stock         $1.20           $0.78      54%
       Basic - Class B Common Stock         $1.09           $0.71      54%
       Diluted                              $1.14           $0.75      52%

     Weighted average common shares
      outstanding:
       Basic - Class A Common Stock        95,085          83,655      14%
       Basic - Class B Common Stock        12,054          12,071       0%
       Diluted                            115,588          99,916      16%

     Segment Information:
     Net sales:
       Constellation Beers and Spirits
         Imported beers                  $526,033        $454,678      16%
         Spirits                          155,371         142,709       9%
           Net sales                     $681,404        $597,387      14%
       Constellation Wines
         Branded wine                    $777,446        $694,365      12%
         Wholesale and other              505,396         392,114      29%
           Net sales                   $1,282,842      $1,086,479      18%
     Consolidated net sales            $1,964,246      $1,683,866      17%

     Operating income:
       Constellation Beers and Spirits   $151,663        $130,000      17%
       Constellation Wines                155,404         145,436       7%
       Corporate Operations and Other     (25,125)        (20,309)     24%
       Restructuring and related charges
        and unusual costs (a)             (15,362)        (60,004)    -74%
     Consolidated operating income       $266,580        $195,123      37%


     (a)  Restructuring and related charges and unusual costs for Six Months
          2005 include financing costs of $10,313, restructuring and related
          charges of $2,782, and the flow through of inventory step-up
          associated with the Hardy acquisition of $2,267. Restructuring and
          related charges and unusual costs for Six Months 2004 include the
          flow through of inventory step-up associated with the Hardy
          acquisition of $14,534, financing costs of $9,244 and restructuring
          and related charges of $36,226.


                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

                                             For the Six        For the Six
                                            Months Ended       Months Ended
                                           August 31, 2004    August 31, 2003

     CASH FLOWS FROM OPERATING
      ACTIVITIES:
     Net income                                $131,943           $74,753

     Adjustments to reconcile net income
      to net cash used in operating activities:
       Depreciation of property, plant and
        equipment                                43,311            38,902
       Deferred tax provision                    14,884             2,811
       Amortization of intangible and other
        assets                                    5,756            14,041
       Loss on disposal of assets                 2,813               468
       Noncash portion of loss on
        extinguishment of debt                    1,799               800
       Stock-based compensation expense              53               183
       Amortization of discount on long-
        term debt                                    35                28
       Equity in earnings of equity method
        investees                                  (262)             (839)
       Gain on change in fair value of
        derivative instruments                       --            (1,181)
       Change in operating assets and
        liabilities, net of effects
        from purchases of businesses:
          Accounts receivable, net             (169,792)          (99,984)
          Inventories, net                     (119,808)           77,826
          Prepaid expenses and other current
           assets                               (36,251)           14,155
          Accounts payable                      145,195           (44,289)
          Accrued excise taxes                   22,085            13,906
          Other accrued expenses and
           liabilities                           20,502           (13,305)
          Other, net                             (8,113)           10,140
            Total adjustments                   (77,793)           13,662
            Net cash provided by operating
             activities                          54,150            88,415

     CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of property, plant and
        equipment                               (50,910)          (46,444)
       Payment of accrued earn-out amount        (1,339)             (978)
       Proceeds from sale of assets               1,024            10,150
       Purchases of businesses, net of cash
        acquired                                     --        (1,069,166)
       Proceeds from sale of marketable
        equity securities                            --               777
       Net cash used in investing
        activities                              (51,225)       (1,105,661)

     CASH FLOWS FROM FINANCING
      ACTIVITIES:
       Principal payments of long-term debt    (234,676)       (1,021,688)
       Payment of preferred stock dividends      (4,902)               --
       Payment of issuance costs of long-
        term debt                                  (901)          (33,473)
       Net proceeds from notes payable          192,472            32,407
       Exercise of employee stock options        17,351            15,227
       Proceeds from employee stock
        purchases                                 2,432             1,817
       Proceeds from issuance of long-term
        debt                                         --         1,600,000
       Proceeds from equity offerings, net
        of fees                                      --           426,359
       Net cash (used in) provided by
        financing activities                    (28,224)        1,020,649

     Effect of exchange rate changes on
      cash and cash investments                  (2,069)           30,252

     NET (DECREASE) INCREASE IN CASH AND
      CASH INVESTMENTS                          (27,368)           33,655
     CASH AND CASH INVESTMENTS, beginning
      of period                                  37,136            13,810
     CASH AND CASH INVESTMENTS, end of
      period                                     $9,768           $47,465


        RECONCILIATION OF REPORTED AND COMPARABLE HISTORICAL INFORMATION
                     (in thousands, except per share data)

     Comparable measures are provided because management uses this
     information in evaluating the results of the continuing operations of
     the Company and 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.  As such, an increase in cost of goods sold
     resulting from the flow through of inventory step-up associated with the
     Hardy acquisition, the imputed interest charge associated with the Hardy
     acquisition, financing costs, restructuring and related charges
     (including exiting the U.S. commodity concentrate product line), gains
     on changes in fair value of derivative instruments, and the relief from
     certain excise tax, duty and other costs incurred in prior years are
     excluded from comparable results.  You may also visit the Company's
     website at http://www.cbrands.com under Investors/Financial
     Information/Financial Reports for a historical reconciliation between
     reported

                                 For the Three          For the Three
                                  Months Ended           Months Ended
                                   August 31,             August 31,
                                      2004       Margin      2003      Margin

    Reported net sales             $1,036,941    100.0%    $911,064    100.0%

    Reported gross profit            $289,683     27.9%    $240,532     26.4%
      Inventory step-up                   972      0.1%       9,017      1.0%
      Concentrate inventory
       write-down                          --      0.0%      16,827      1.8%
      Comparable gross profit        $290,655     28.0%    $266,376     29.2%


    Reported operating income        $156,159     15.1%     $96,156     10.6%
      Financing costs                      --      0.0%       5,209      0.6%
      Restructuring and related
       charges                          1,169      0.1%      17,083      1.9%
      Inventory step-up                   972      0.1%       9,017      1.0%
      Concentrate inventory
       write-down                          --      0.0%      16,827      1.8%
    Comparable operating income      $158,300     15.3%    $144,292     15.8%


    Reported net income               $80,614      7.8%     $35,564      3.9%
      Financing costs                      --      0.0%       3,334      0.4%
      Restructuring and related
       charges                            748      0.1%      10,933      1.2%
      Inventory step-up                   622      0.1%       5,771      0.6%
      Concentrate inventory
       write-down                          --      0.0%      10,769      1.2%
      Imputed interest charge              --      0.0%          --      0.0%
      Gain on derivative
       instruments                         --      0.0%          --      0.0%
    Comparable net income             $81,984      7.9%     $66,371      7.3%


    Reported diluted earnings
     per share                          $0.69                 $0.34
      Financing costs                      --                  0.03
      Restructuring and related
       charges                           0.01                  0.10
      Inventory step-up                  0.01                  0.06
      Concentrate inventory
       write-down                          --                  0.10
      Imputed interest charge              --                    --
      Gain on derivative
       instruments                         --                    --
    Comparable diluted earnings
     per share (1)                      $0.71                 $0.64


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


        RECONCILIATION OF REPORTED AND COMPARABLE HISTORICAL INFORMATION
                     (in thousands, except per share data)

     Comparable measures are provided because management uses this
     information in evaluating the results of the continuing operations of
     the Company and 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.  As such, an increase in cost of goods sold
     resulting from the flow through of inventory step-up associated with the
     Hardy acquisition, the imputed interest charge associated with the Hardy
     acquisition, financing costs, restructuring and related charges
     (including exiting the U.S. commodity concentrate product line), gains
     on changes in fair value of derivative instruments, and the relief from
     certain excise tax, duty and other costs incurred in prior years are
     excluded from comparable results.  You may also visit the Company's
     website at http://www.cbrands.com under Investors/Financial
     Information/Financial Reports for a historical reconciliation between
     reported

                                      For the Six         For the Six
                                      Months Ended        Months Ended
                                       August 31,          August 31,
                                          2004     Margin     2003     Margin

    Reported net sales                 $1,964,246  100.0%  $1,683,866  100.0%

    Reported gross profit                $540,145   27.5%    $449,617   26.7%
      Inventory step-up                     2,267    0.1%      14,534    0.9%
      Concentrate inventory
       write-down                              --    0.0%      16,827    1.0%
    Comparable gross profit              $542,412   27.6%    $480,978   28.6%


    Reported operating income            $266,580   13.6%    $195,123   11.6%
      Financing costs                      10,313    0.5%       9,244    0.5%
      Restructuring and related charges     2,782    0.1%      19,399    1.2%
      Inventory step-up                     2,267    0.1%      14,534    0.9%
      Concentrate inventory write-down         --    0.0%      16,827    1.0%
    Comparable operating income          $281,942   14.4%    $255,127   15.2%


    Reported net income                  $131,943    6.7%     $74,753    4.4%
      Financing costs                       6,601    0.3%       5,916    0.4%
      Restructuring and related charges     1,780    0.1%      12,416    0.7%
      Inventory step-up                     1,451    0.1%       9,302    0.6%
      Concentrate inventory write-down         --    0.0%      10,769    0.6%
      Imputed interest charge                  --    0.0%       1,061    0.1%
      Gain on derivative instruments           --    0.0%        (756)   0.0%
    Comparable net income                $141,775    7.2%    $113,461    6.7%


    Reported diluted earnings
     per share                              $1.14               $0.75
      Financing costs                        0.06                0.06
      Restructuring and related charges      0.02                0.12
      Inventory step-up                      0.01                0.09
      Concentrate inventory write-down         --                0.11
      Imputed interest charge                  --                0.01
      Gain on derivative instruments           --               (0.01)
    Comparable diluted earnings per
     share (1)                              $1.23               $1.14


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



RECONCILIATION OF REPORTED AND COMPARABLE DILUTED EARNINGS PER SHARE GUIDANCE


                                            Range for the    Range for the
                                           Quarter Ending     Year Ending
                                         November 30, 2004  February 28, 2005

    Forecasted reported diluted earnings
     per share                            $0.80    $0.84      $2.50    $2.55
    Inventory step-up                      0.01     0.01       0.03     0.03
    Financing costs - Call of senior
     notes                                   --       --       0.06     0.06
    Restructuring and related charges      0.01     0.01       0.03     0.03
    Forecasted comparable diluted
     earnings per share                   $0.82    $0.86      $2.62    $2.67


                                                    Actual         Actual
                                                   For the         For the
                                                 Three Months       Year
                                                     Ended          Ended
                                                  November 30,   February 29,
                                                     2003           2004

    Reported diluted earnings per share              $0.73          $2.06
    Excise tax, duty and other costs                    --          (0.06)
    Inventory step-up                                 0.02           0.13
    Concentrate inventory write-down                    --           0.10
    Financing costs                                   0.01           0.07
    Restructuring and related charges                 0.05           0.19
    Imputed interest charge                             --           0.01
    Gain on derivative instruments                      --          (0.01)
    Comparable diluted earnings per share (1)        $0.80          $2.49


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


ATTACHMENTS TO CONSTELLATION BRANDS SECOND QUARTER FISCAL 2005 MEDIA RELEASE

ITEMS AFFECTING COMPARABILITY FOR FISCAL 2005

Financing costs - Call (Redemption) of senior notes - On Feb. 10, 2004, the company called its $200,000,000 8.5% senior subordinated notes due 2009 which were redeemed March 2004. In connection with this redemption, the company incurred an unusual charge in the first quarter of fiscal 2005 related to the call premium and the remaining unamortized financing fees associated with the original issuance of the bonds. The company expects to incur a charge of $0.06 per share for fiscal 2005.

Restructuring and related charges -- In connection with the further realignment of business operations within the company's wine division, the company expects restructuring and related charges of approximately $0.03 per share for fiscal 2005.

Inventory step-up -- The Hardy acquisition resulted in an allocation of purchase price in excess of book value to certain inventory on hand at the date of purchase. This allocation of purchase price in excess of book value is referred to as inventory step-up. The inventory step-up represents an assumed manufacturing profit attributable to Hardy preacquisition. For inventory produced and sold after the acquisition date, the related manufacturer's profit accrues to the company. As a result of final appraisals, the company expects the flow through of inventory step-up to have a negative impact of approximately $0.03 per share for fiscal 2005.

ITEMS AFFECTING COMPARABILITY FOR FISCAL 2004

Excise tax, duty and other costs -- In the fourth quarter of fiscal 2004, the company recognized a net benefit of $10.4 million related to relief from certain excise taxes, duty and other costs incurred in prior years. The net $10.4 million is comprised of a $9.2 million increase in net sales, a $2.3 million reduction in cost of product sold and a $1.1 million increase in SG&A. This had a positive impact of approximately $0.06 per share for fiscal 2004.

Inventory step-up - The flow through of inventory step-up had an impact of approximately $0.13 per share for fiscal 2004.

Concentrate inventory write-down -- The company made a decision to exit the U.S. commodity concentrate product line -- located in Madera, California. The commodity concentrate product line was facing declining sales and profits and was not part of the company's core business, beverage alcohol. The company continues to produce and sell value-added, proprietary products such as MegaColors. The charge for the write-down of concentrate inventory was $0.10 per share for fiscal 2004. In addition, and related to exiting this product line, the company expects to record restructuring and related charges of approximately $0.17 per share, of which $0.14 was recorded in fiscal 2004 and $0.03 will be recorded in fiscal 2005.

Financing costs -- Hardy acquisition -- In connection with the Hardy acquisition, the company recorded amortization expense for deferred financing costs associated with noncontinuing financing, primarily related to the bridge loan agreement. This charge was $0.07 per share for fiscal 2004.

Restructuring and related charges -- Restructuring and related charges resulted from the realignment of business operations in the company's wine division, as previously announced in the fourth quarter of fiscal 2003, and exiting the commodity concentrate product line. The company incurred total charges of approximately $0.19 per share for fiscal 2004 ($0.05 for realignment of businesses and $0.14 for exiting the commodity concentrate product line).

Imputed interest charge - In connection with the Hardy acquisition and in accordance with purchase accounting, the company was required to take a one-time imputed interest charge for the time period between when the company obtained control of Hardy and the date it paid Hardy shareholders. The company incurred a charge of $0.01 per share for fiscal 2004.

Gain on change in fair value of derivative instruments -- In connection with the Hardy acquisition, the company entered into derivative instruments to cap the cost of the acquisition in U.S. dollars. The company recorded a gain in the first quarter, which represented the net change in value of the derivative instruments from the beginning of the first quarter until the date Hardy shareholders were paid. The company recorded a gain of $0.01 per share for fiscal 2004.

CONTACT:
Philippa Dworkin
585-218-3733

Mike Martin
585-218-3669

Investors
Lisa Schnorr
585-218-3677
All of Constellation Brands, Inc.