Constellation Reports Record Fiscal 2003 and Fourth Quarter Financial Results

Company Raises Earnings Guidance for Fiscal 2004 FAIRPORT, N.Y., April 9 /PRNewswire-FirstCall/ - Constellation Brands, Inc. (NYSE: STZ and STZ.B; ASX: CBR) today reported record financial results for its full year and fourth quarter ended February 28, 2003. For fiscal 2003, net income on a comparable basis increased $35 million, or 22 percent, to reach a record $192 million and diluted earnings per share on a comparable basis increased 16 percent to reach $2.07. For the fourth quarter, net income on a comparable basis increased seven million dollars, or 21 percent, to reach $41 million and diluted earnings per share on a comparable basis increased 19 percent to reach $0.44.

Net income and diluted earnings per share as reported under generally accepted accounting principles for the full year increased 49 percent to reach $203 million and 41 percent to reach $2.19 versus $136 million and $1.55, respectively. Net income and diluted earnings per share as reported under generally accepted accounting principles for the fourth quarter increased 93 percent to reach $52 million and 87 percent to reach $0.56 versus $27 million and $0.30, respectively.

Net income on a comparable basis and diluted earnings per share on a comparable basis excludes restructuring charges and a gain on change in fair value of derivative instruments for Fiscal 2003, and excludes an extraordinary charge in Fiscal 2002 and reflects the impact of SFAS 142 as if it had been adopted as of March 1, 2001. A table reconciling these measures, for the year and quarter, is included in the notes to the consolidated financial statements in this press release. Richard Sands, Chairman and Chief Executive Officer of Constellation, said, "Constellation's results for fiscal 2003 were excellent. We achieved solid beer sales growth, in part from a successful price increase within a strong overall beer pricing environment; generated good wine results by focusing on growth areas and profitability; had steady spirits performance; and grew our U.K. business." Mr. Sands added, "Our revenues increased to over $2.7 billion and we leveraged those sales to generate earnings above the targets we set at the beginning of the year. In addition, we generated $482 million of adjusted EBITDA, $265 million in net cash provided by operating activities and $165 million free cash flow from operations, which we used to reduce our debt."

Mr. Sands noted, "Constellation's performance demonstrates that our strategy of operating across the beer, wine and spirits categories, with a decentralized organization staying close to markets and customers, produces consistent sales and earnings growth. I am pleased that our focus has translated to superior overall performance."

Mr. Sands concluded, "Having just completed our acquisition of BRL Hardy, Constellation is poised to build upon fiscal 2003 and produce excellent results again in fiscal 2004. Through this strategic acquisition, we have increased our scale, expanded our product breadth while creating the world's leading wine business, and will accelerate our overall sales and earnings growth rates. We believe the prospects for our businesses are tremendous and we intend to leverage all of our growth opportunities."

Adjusted EBITDA and free cash flow from operations represent non-GAAP (Generally Accepted Accounting Principles) financial measures. A table reconciling these measures is included in the notes to the consolidated financial statements in this release.

Consolidated Results

For the fiscal year ended February 28, 2003 ("Fiscal 2003"), net sales grew five percent, reaching $2.7 billion. Excluding the $51 million favorable impact of currency and the four-month benefit from the Ravenswood acquisition of $14 million, net sales increased two percent for the fiscal year. The increase was attributed to growth in fine wine, imported beer, U.K. wholesale and spirits, partially offset by declines in popular and premium wine and U.K. brands.

For the three months ended February 28, 2003 ("Fourth Quarter 2003") net sales increased six percent to reach $653 million compared to the three months ended February 28, 2002 ("Fourth Quarter 2002"). Excluding the $21 million favorable impact of currency, net sales increased two percent for the quarter. The increase was driven by growth in fine wine, imported beer, spirits and U.K. wholesale, partially offset by declines in popular and premium wine and U.K. brands.

Fiscal 2003 gross profit increased nine percent to $761 million and gross profit margin improved 110 basis points compared to the prior year period. Gross profit for the fourth quarter increased nine percent to reach $177 million and gross margin improved 70 basis points. The increase in gross profit for both the year and quarter resulted primarily from: a favorable mix of sales towards higher margin wine and spirits brands; lower average wine costs; and higher average imported beer prices; partially offset by higher average imported beer costs.

Fiscal 2003 selling general and administrative expenses on a comparable basis increased $26 million. The increase was primarily the result of higher advertising costs on imported beer, higher selling costs to support growth in U.K. wholesale and a gain on the sale of an asset in the prior year. As a percent of net sales, selling, general and administrative expenses on a comparable basis were 12.8 percent compared to 12.5 percent for the prior year.

For the quarter, selling, general and administrative expenses on a comparable basis increased $7 million. The increase was primarily the result of higher advertising costs on imported beer and higher selling costs to support growth in U.K. wholesale. As a percent of net sales, selling, general and administrative expenses on a comparable basis were 13.3 percent compared to 13.0 percent in the prior year period.

Selling, general and administrative expenses under generally accepted accounting principles for Fiscal 2003 and Fourth Quarter 2003 declined $2 million and $1 million, respectively.

Selling, general and administrative expenses on a comparable basis is a non-GAAP (Generally Accepted Accounting Principles) financial measure. A table reconciling this measure, for the year and the quarter, is included in the notes to the consolidated financial statements in this release.

Operating income on a comparable basis increased 11 percent for the fiscal year and nine percent for the quarter due to increased sales and improving gross profit margins.

Operating income reported under generally accepted accounting principles increased 18 percent for the fiscal year and 14 percent for the quarter. Operating income on a comparable basis is a non-GAAP (Generally Accepted Accounting Principles) financial measure. A table reconciling this measure, for the year and the quarter, is included in the notes to the consolidated financial statements in this release.

Equity in earnings from Pacific Wine Partners, an equally owned joint venture with BRL Hardy at February 28, 2003, was $12 million for the full year. Fourth Quarter 2003 equity in earnings was two million dollars versus one million dollars for Fourth Quarter 2002. Growth of the joint venture continues to be driven by strong demand for both the Banrock Station and Blackstone brands.

Net interest expense for the year declined nine million dollars to $105 million due to both lower average debt levels and a lower average borrowing rate. Net interest expense for Fourth Quarter 2003 declined three million dollars as a result of lower average debt levels.

As a result of these factors, net income and diluted earnings per share on a comparable basis for Fiscal 2003 increased 22 percent and 16 percent, respectively, reaching $192 million and $2.07. Net income and diluted earnings per share on a comparable basis for Fourth Quarter 2003 increased 21 percent and 19 percent, respectively, reaching $41 million and $0.44. Net income and diluted earnings per share on a reported basis for Fiscal 2003 increased 49 percent and 41 percent, respectively, reaching $203 million and $2.19. Net income and diluted earnings per share on a reported basis for Fourth Quarter 2003 increased 93 percent and 87 percent, respectively, reaching $52 million and $0.56.

Adjusted EBITDA reached $482 million, an increase of 12 percent for Fiscal 2003. Free cash flow from operations rose to $165 million for the fiscal year, an increase of 16 percent.

Imported Beer and Spirits Results

Imported beer and spirits net sales for Fiscal 2003 grew six percent to reach $1.1 billion and operating income on a comparable basis grew 17 percent to reach $218 million. Imported beer sales increased seven percent primarily due to a price increase on the Company's Mexican brands, which took effect during the first quarter of Fiscal 2003. Spirits sales were up three percent for the year, on a slight increase in branded sales and growth in bulk sales. Fourth Quarter 2003 net sales were $224 million, an increase of three percent compared to Fourth Quarter 2002. Imported beer sales increased three percent versus 38 percent in Fourth Quarter 2002. The increase in imported beer sales was driven by the price increase on the Company's Mexican brands, partially offset by slightly lower volume. Spirits net sales growth for the quarter of four percent resulted primarily from increased volume in the Company's vodka and Canadian whisky brands, particularly Skol vodka and Black Velvet Canadian whisky.

Operating income on a comparable basis increased 17 percent for the year and 13 percent for the quarter compared to the prior year periods. The growth in operating income was primarily the result of higher sales, favorable beer pricing and lower average spirits costs, particularly tequila, partially offset by increased imported beer costs and imported beer advertising. Operating income reported under generally accepted accounting principles increased 22 percent to reach $218 million for the fiscal year and 19 percent to reach $42 million for the quarter.

Popular and Premium Wine Results

Net sales for Fiscal 2003 were $749 million compared to $778 million the prior year, a decline of four percent. Lower bulk wine and concentrate sales contributed to half of the sales decline. The decline in branded sales was primarily volume related as the Company continues to be selective in its promotional activities, focusing instead on growth areas, long-term brand building initiatives and increased profitability. Despite the lower sales, operating profit on a comparable basis declined only slightly and operating margin on a comparable basis improved 40 basis points.

Net sales for the quarter declined three percent due to a two percent decline in branded wine sales, and lower grape concentrate sales. Operating income on a comparable basis improved slightly as lower average costs offset lower volumes.

Operating income reported under generally accepted accounting principles for Fiscal 2003 was $108 million, an increase of 3 percent. For Fourth Quarter 2003, operating income reported under generally accepted principles declined four percent to $28 million.

U.K. Brands and Wholesale Results

Net sales increased 10 percent to reach $790 million for Fiscal 2003. The increase was due to growth in the U.K. wholesale business and a positive currency impact, partially offset by lower branded sales. Excluding the $51 million favorable impact of currency, net sales for Fiscal 2003 increased three percent. Fiscal 2003 operating income on a comparable basis increased six percent to reach $57 million due to a favorable impact from currency partially offset by increased selling expenses to support growth in the U.K. wholesale business.

Net sales for Fourth Quarter 2003 were $201 million versus $176 million reported for the comparable quarter a year ago, an increase of 14 percent. Excluding the $21 million favorable impact of currency, net sales increased three percent attributed to growth in the U.K. wholesale business partially offset by declines in U.K. brands. For the quarter, operating income on a comparable basis increased two million dollars to reach $10 million. Operating income reported under generally accepted accounting principles increased nine million dollars to $57 million for Fiscal 2003 and three million dollars to $10 million for Fourth Quarter 2003.

Fine Wine Results

Net sales for Fiscal 2003 increased $24 million, or 18 percent to reach $156 million. The increase was due primarily to increases on the Ravenswood and Simi brands. Excluding the $14 million four-month benefit from the Ravenswood brand, which was acquired July 2001, net sales increased seven percent for Fiscal 2003.

Driven by volume gains from the Ravenswood, Simi, Estancia and Franciscan brands, fine wine net sales for Fourth Quarter 2003 increased 19 percent compared to the prior year.

Operating profit on a comparable basis increased 28 percent for both the fiscal year and fourth quarter to reach $56 million and $15 million, respectively. The increase is a result of higher sales and leveraging selling, general and administrative expenses.

Operating income reported under generally accepted accounting principles increased 42 percent to reach $56 million for the fiscal year and 40 percent to reach $15 million for Fourth Quarter 2003. Restructuring charges and gain from derivative instruments In connection with the acquisition of BRL Hardy Limited, which closed April 9th (Australia), the Company had put in place a collar to lock in a range for the cost of the transaction in U.S. dollars. As a result of this hedge, the Company was required to recognize a gain of $23 million under GAAP, based on the change in fair value of the instrument on February 28, 2003. However, due to the movement of exchange rates between February 28th and April 9th, the Company will record a loss of approximately two million dollars under GAAP from the change in fair value of derivative instruments in the first quarter of fiscal 2004.

Also in connection with the BRL Hardy acquisition, the Company expects to take a one-time charge in fiscal 2004 for bank fees related to the transaction of approximately nine million dollars.

Constellation also had restructuring charges in the amount of five million dollars, resulting from the realignment of business operations in the Company's popular and premium wine division, as a result of the decision to close two facilities during fiscal 2004. This realignment was undertaken to further improve productivity and is not expected to have an impact on brand sales. As part of its realignment, the popular and premium wine division expects to incur an additional six million dollars in charges during the course of Fiscal 2004.

Also in Fiscal 2004, in connection with the BRL Hardy acquisition, the Company expects to take a restructuring charge related to the integration of BRL Hardy in the amount of three million dollars.

Outlook

The following statements are management's current diluted earnings per share expectations both on a GAAP basis and a comparable basis for the Company's three months ending May 31, 2003 ("First Quarter 2004"), and operating income expectations both on a GAAP basis and a comparable basis for the fiscal year ending February 29, 2004 ("Fiscal 2004"). These statements are made as of the date of this press release and are forward-looking. Actual results may differ materially from these expectations due to a number of risks and uncertainties.

-- Diluted earnings per share on a comparable basis for First Quarter 2004 are expected to be within a range of $0.46 to $0.48 versus $0.40 for First Quarter 2003.

-- Diluted earnings per share reported under generally accepted accounting principles for First Quarter 2004 are expected to be within a range of $0.41 to $0.43 versus $0.40 for First Quarter 2003.

-- Operating income on a comparable basis for Fiscal 2004 is expected to be within a range of $560 million to $580 million versus $410 million for Fiscal 2003.

-- Operating income for Fiscal 2004 calculated under generally accepted accounting principles is expected to be within a range of $542 million to $562 million versus $405 million for Fiscal 2003.

The diluted earnings per share and operating income expectations both on GAAP basis and a comparable basis are based on the Company's current capital structure and include the 3.3 million shares issued in connection with the BRL Hardy transaction.

Status of Business Outlook

During the quarter, Constellation may reiterate the estimates set forth above under the heading Outlook (collectively, the "Outlook"). Prior to the start of the Quiet Period (described below), 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 May 16, 2003, 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. During the Quiet Period, Constellation's representatives will not comment concerning the Outlook or Constellation's financial results or expectations. The Quiet Period will extend until the day when Constellation's next quarterly Earnings Release is published, presently scheduled for Tuesday, July 1, 2003.

Definitions of Certain Financial Terms

This earnings release contains financial measures and terms not calculated in accordance with generally accepted accounting principles, but derived from results reported under generally accepted accounting principles. In accordance with SEC Regulation G, the Company has provided below the following term definitions for financial measures not calculated in accordance with generally accepted accounting principles. Tables reconciling non-GAAP financial measures to GAAP financial measures, for the year and the quarter, are included in the notes to the consolidated financial statements in this release.

Net income on a comparable basis -- Excludes restructuring charges and gain on change in fair value of derivative instruments for Fiscal 2003, and excludes extraordinary charge in Fiscal 2002 and reflects the adoption of Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets", as if the adoption of SFAS 142 had occurred in the prior year. This measure is provided because management uses this information in evaluating the results of the continuing operations of the Company and believes this information provides investors better insight in order to evaluate year over year financial performance and trends.

Diluted earnings per share on a comparable basis -- Excludes restructuring charges and gain on change in fair value of derivative instruments for Fiscal 2003, and excludes extraordinary charge in Fiscal 2002 and reflects the adoption of Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets", as if the adoption of SFAS 142 had occurred in the prior year. This measure is provided because management uses this information in evaluating the results of the continuing operations of the Company and believes this information provides investors better insight in order to evaluate year over year financial performance and trends.

Operating income on a comparable basis -- Excludes restructuring charges and gain on change in fair value of derivative instruments for Fiscal 2003, and excludes extraordinary charge in Fiscal 2002 and reflects the adoption of Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets", as if the adoption of SFAS 142 had occurred in the prior year. This measure is provided because management uses this information in evaluating the results of the continuing operations of the Company and believes this information provides investors better insight in order to evaluate year over year financial performance and trends.

Selling, general and administrative expenses on a comparable basis -- Reflects the adoption of Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets", as if the adoption of SFAS 142 had occurred in the prior year. This measure is provided because management uses this information in evaluating the results of the continuing operations of the Company and believes this information provides investors better insight in order to evaluate year over year financial performance and trends.

Adjusted EBITDA -- Operating income, plus restructuring charges, depreciation, amortization and equity in earnings of joint venture. This measure is routinely calculated and communicated by the Company because management believes it is of interest to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds.

Free Cash Flow from Operations -- Net cash provided by operating activities, less purchases of property, plant and equipment. Management believes this measure provides meaningful information for evaluating the overall financial performance of the Company and its ability to repay debt or make future investments after purchases of property, plant and equipment.

EITF No. 01-09

Beginning March 1, 2002, the Company adopted Emerging Issues Task Force Issue No. 01-09 ("EITF 01-09"), "Accounting for Consideration Given by a Vendor to a Customer or a Reseller of a Vendor's Products." As a result, the Company has reclassified certain promotional expenditures paid to distributors, retailers or consumers as a reduction of revenue and non-cash consideration as an increase to cost of product sold. The Company previously reported these expenses as selling, general and administrative expenses. Prior-period financial information has been reclassified to comply with this guidance. This reclassification does not affect operating income or net income. Additional historical financial information, adjusted to show the effect of EITF 01-09, can be found on the Company's web site: http://www.cbrands.com.

Forward-Looking Statements

The statements made under the heading 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. 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 comparable basis for First Quarter 2004, (ii) the Company's estimated diluted earnings per share on a GAAP basis for First Quarter 2004, (iii) the Company's estimated operating income on a comparable basis for Fiscal 2004, and (iv) the Company's estimated operating income on a GAAP basis for Fiscal 2004, 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 successful integration of the BRL Hardy business into that of the Company; 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 federal and state excise taxes on beverage alcohol products; changes in foreign 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 February 28, 2002.

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. The Company is the largest multi-category supplier of beverage alcohol in the United States; a leading producer and exporter of wine from Australia and New Zealand; and both a major producer and independent drinks wholesaler in the United Kingdom. Well-known brands in Constellation's portfolio include: Corona Extra, Pacifico, St. Pauli Girl, Black Velvet, Fleischmann's, Estancia, Simi, Ravenswood, Blackstone, Banrock Station, Hardys, Nobilo, Alice White, Talus, Vendange, Almaden, Arbor Mist, Stowells of Chelsea and Blackthorn.

CONFERENCE CALL DETAILS

A conference call to discuss the quarterly results will be hosted by Richard Sands, Chairman and CEO, and Tom Summer, Executive Vice President and CFO, on Wednesday, April 9, 2003, at 5:00 p.m. Eastern time and 7:30 a.m. Adelaide time. 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) is available on the Internet at Constellation's web site: http://www.cbrands.com under "Investor Information." If you are unable to participate in the conference call, there will be a replay available on Constellation's web site or by dialing 412 858-1440 from approximately 7:00 p.m. (Eastern) on Wednesday, April 09, 2003, through 9:00 a.m. (Eastern) on Thursday, April 17, 2003.

Digital Playback Instructions - Courtesy of ChorusCall
1. Dial 412-858-1440.
2. Enter '015' when prompted for your account number followed by the # sign.
3. Please press '1' to play a recorded conference.
4. Please enter '234105' when prompted to enter the conference number followed by the # sign.
5. Please clearly state your name and company name when prompted to do so followed by any key.
6. Please press '1' to begin the conference playback.


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

                                                February 28,      February 28,
    ASSETS                                          2003              2002
    CURRENT ASSETS:
         Cash and cash investments                 $13,810            $8,961
         Accounts receivable, net                  399,095           383,922
         Inventories, net                          819,912           777,586
         Prepaid expenses and other
          current assets                            97,284            60,779
             Total current assets                1,330,101         1,231,248
    PROPERTY, PLANT AND EQUIPMENT, net             602,469           578,764
    GOODWILL                                       722,223           668,083
    INTANGIBLE ASSETS, net                         382,428           425,987
    OTHER ASSETS                                   159,109           165,303
         Total assets                           $3,196,330        $3,069,385

    LIABILITIES AND STOCKHOLDERS' EQUITY
    CURRENT LIABILITIES:
         Notes payable                              $2,623           $54,775
         Current maturities of long-term
          debt                                      71,264            81,609
         Accounts payable                          171,073           153,433
         Accrued excise taxes                       36,421            60,238
         Other accrued expenses and
          liabilities                              303,827           245,155
             Total current liabilities             585,208           595,210
    LONG-TERM DEBT, less current
     maturities                                  1,191,631         1,293,183
    DEFERRED INCOME TAXES                          145,239           163,146
    OTHER LIABILITIES                               99,268            62,110
    STOCKHOLDERS' EQUITY                         1,174,984           955,736
         Total liabilities and
          stockholders' equity                  $3,196,330        $3,069,385


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

                                             For the      For the
                                              Three        Three
                                              Months       Months
                                              Ended        Ended
                                           February 28, February 28,   Percent
                                               2003         2002        Change

     Gross sales                             $853,863     $803,736        6%
     Excise taxes                            (200,829)    (186,391)       8%
     Net sales                                653,034      617,345        6%
     Cost of product sold                    (475,801)    (454,474)       5%
          Gross profit                        177,233      162,871        9%
     Selling, general and administrative
      expenses                                (87,146)     (88,137)      -1%
     Restructuring charges                     (4,764)       --           N/A
          Operating income                     85,323       74,734       14%
     Gain on change in fair value of
      derivative instruments                   23,129        --           N/A
     Equity in earnings of joint venture        2,143          639      235%
     Interest expense, net                    (24,893)     (27,781)     -10%
          Income before income taxes and
           extraordinary item                  85,702       47,592       80%
     Provision for income taxes               (33,681)     (19,037)      77%
          Income before extraordinary
           item                                52,021       28,555       82%
     Extraordinary item, net of income
      taxes                                     --          (1,554)    -100%
           Net income                         $52,021      $27,001       93%

     Earnings per common share:
          Basic:
          Income before extraordinary
           item                                 $0.57        $0.33       73%
          Extraordinary item, net of
           income taxes                         --           (0.02)    -100%
          Earnings per common share -
           basic                                $0.57        $0.31       84%

          Diluted:
          Income before extraordinary
           item                                 $0.56        $0.32       75%
          Extraordinary item, net of
           income taxes                         --           (0.02)    -100%
          Earnings per common share -
           diluted                              $0.56        $0.30       87%

     Weighted average common shares
      outstanding:
          Basic                                90,586       87,891        3%
          Diluted                              93,209       90,773        3%

     Segment Information:
     Net sales:
          Imported Beer and Spirits
              Imported beer                  $160,908     $156,775        3%
              Spirits                          62,926       60,272        4%
                   Net sales                 $223,834     $217,047        3%
          Popular and Premium Wine
              Branded                        $174,181     $178,411       -2%
              Other                            13,955       14,816       -6%
                   Net sales                 $188,136     $193,227       -3%
          U.K. Brands and Wholesale
              Branded                         $49,758      $46,847        6%
              Wholesale                       151,551      129,220       17%
                   Net sales                 $201,309     $176,067       14%
          Fine Wine                           $43,731      $36,809       19%
          Intersegment eliminations           $(3,976)     $(5,805)     -32%
     Consolidated net sales                  $653,034     $617,345        6%

     Operating income:
          Imported Beer and Spirits           $42,415      $35,571       19%
          Popular and Premium Wine             27,907       29,075       -4%
          U.K. Brands and Wholesale            10,159        7,113       43%
          Fine Wine                            15,229       10,854       40%
          Corporate Operations                (10,387)      (7,879)      32%
     Consolidated operating income            $85,323      $74,734       14%

     (a) Reflects the adoption of EITF 01-09.  Prior-period has been
         reclassified to comply with this guidance.


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

                                           For the Year  For the Year
                                              Ended         Ended
                                           February 28,  February 28, Percent
                                               2003          2002      Change

     Gross sales                            $3,583,082    $3,420,213       5%
     Excise taxes                             (851,470)     (813,455)      5%
     Net sales                               2,731,612     2,606,758       5%
     Cost of product sold                   (1,970,897)   (1,911,598)      3%
          Gross profit                         760,715       695,160       9%
     Selling, general and administrative
      expenses                                (350,993)     (352,679)      0%
     Restructuring charges                      (4,764)        --          N/A
          Operating income                     404,958       342,481      18%
     Gain on change in fair value of
      derivative instruments                    23,129         --          N/A
     Equity in earnings of joint venture        12,236         1,667     634%
     Interest expense, net                    (105,387)     (114,189)     -8%
          Income before income taxes and
           extraordinary item                  334,936       229,959      46%
     Provision for income taxes               (131,630)      (91,984)     43%
          Income before extraordinary
           item                                203,306       137,975      47%
     Extraordinary item, net of income
      taxes                                      --           (1,554)   -100%
           Net income                         $203,306      $136,421      49%

     Earnings per common share:
          Basic:
          Income before extraordinary
           item                                  $2.26         $1.62      40%
          Extraordinary item, net of
           income taxes                          --            (0.02)   -100%
          Earnings per common share -
           basic                                 $2.26         $1.60      41%

          Diluted:
          Income before extraordinary
           item                                  $2.19         $1.57      39%
          Extraordinary item, net of
           income taxes                          --            (0.02)   -100%
          Earnings per common share -
           diluted                               $2.19         $1.55      41%

     Weighted average common shares
      outstanding:
          Basic                                 89,856        85,505       5%
          Diluted                               92,746        87,825       6%

     Segment Information:
     Net sales:
          Imported Beer and Spirits
              Imported beer                   $776,006      $726,953       7%
              Spirits                          282,307       274,702       3%
                   Net sales                $1,058,313    $1,001,655       6%
          Popular and Premium Wine
              Branded                         $692,664      $706,570      -2%
              Other                             56,760        71,469     -21%
                   Net sales                  $749,424      $778,039      -4%
          U.K. Brands and Wholesale
              Branded                         $229,472      $224,365       2%
              Wholesale                        560,346       495,532      13%
                   Net sales                  $789,818      $719,897      10%
          Fine Wine                           $155,758      $131,914      18%
          Intersegment eliminations           $(21,701)     $(24,747)    -12%
     Consolidated net sales                 $2,731,612    $2,606,758       5%

     Operating income:
          Imported Beer and Spirits           $217,963      $178,805      22%
          Popular and Premium Wine             107,715       104,781       3%
          U.K. Brands and Wholesale             56,577        47,270      20%
          Fine Wine                             55,515        39,169      42%
          Corporate Operations                 (32,812)      (27,544)     19%
     Consolidated operating income            $404,958      $342,481      18%

    (a) Reflects the adoption of EITF 01-09.  Prior-period has been
        reclassified to comply with this guidance.


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

                                             For the      For the
                                              Three        Three
                                              Months       Months
                                              Ended        Ended
                                           February 28, February 28, Percent
                                               2003         2002      Change

     Gross sales                             $853,863     $803,736       6%
     Excise taxes                            (200,829)    (186,391)      8%
     Net sales                                653,034      617,345       6%
     Cost of product sold                    (475,801)    (454,474)      5%
          Gross profit                        177,233      162,871       9%
     Selling, general and administrative
      expenses                                (87,146)     (80,223)      9%
          Operating income                     90,087       82,648       9%
     Equity in earnings of joint venture        2,143          639     235%
     Interest expense, net                    (24,893)     (27,781)    -10%
          Income before income taxes and
           extraordinary item                  67,337       55,506      21%
     Provision for income taxes               (26,463)     (21,654)     22%
           Net income                         $40,874      $33,852      21%

     Earnings per common share:
          Basic                                 $0.45        $0.39      15%
          Diluted                               $0.44        $0.37      19%

     Weighted average common shares
      outstanding:
          Basic                                90,586       87,891       3%
          Diluted                              93,209       90,773       3%

     Segment Information:
     Net sales:
          Imported Beer and Spirits
              Imported beer                  $160,908     $156,775       3%
              Spirits                          62,926       60,272       4%
                   Net sales                 $223,834     $217,047       3%
          Popular and Premium Wine
              Branded                        $174,181     $178,411      -2%
              Other                            13,955       14,816      -6%
                   Net sales                 $188,136     $193,227      -3%
          U.K. Brands and Wholesale
              Branded                         $49,758      $46,847       6%
              Wholesale                       151,551      129,220      17%
                   Net sales                 $201,309     $176,067      14%
          Fine Wine                           $43,731      $36,809      19%
          Intersegment eliminations           $(3,976)     $(5,805)    -32%
     Consolidated net sales                  $653,034     $617,345       6%

     Operating income:
          Imported Beer and Spirits           $42,415      $37,589      13%
          Popular and Premium Wine             32,671       32,453       1%
          U.K. Brands and Wholesale            10,159        8,597      18%
          Fine Wine                            15,229       11,888      28%
          Corporate Operations                (10,387)      (7,879)     32%
     Consolidated operating income            $90,087      $82,648       9%

     (a) Reflects the adoption of EITF 01-09.  Prior-period has been
         reclassified to comply with this guidance.

     (b) Excludes restructuring charges and gain on change in fair value of
         derivative instruments for Fiscal 2003, and excludes extraordinary
         charge in Fiscal 2002 and reflects the impact of SFAS 142 as if it
         had been adopted as of March 1, 2001.


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

                                           For the Year  For the Year
                                              Ended         Ended
                                           February 28,  February 28, Percent
                                               2003          2002      Change

     Gross sales                            $3,583,082    $3,420,213      5%
     Excise taxes                             (851,470)     (813,455)     5%
     Net sales                               2,731,612     2,606,758      5%
     Cost of product sold                   (1,970,897)   (1,911,598)     3%
          Gross profit                         760,715       695,160      9%
     Selling, general and administrative
      expenses                                (350,993)     (325,380)     8%
          Operating income                     409,722       369,780     11%
     Equity in earnings of joint venture        12,236         1,667    634%
     Interest expense, net                    (105,387)     (114,189)    -8%
          Income before income taxes and
           extraordinary item                  316,571       257,258     23%
     Provision for income taxes               (124,412)     (100,337)    24%
           Net income                         $192,159      $156,921     22%

     Earnings per common share:
          Basic                                  $2.14         $1.84     16%
          Diluted                                $2.07         $1.79     16%

     Weighted average common shares
      outstanding:
          Basic                                 89,856        85,505      5%
          Diluted                               92,746        87,825      6%

     Segment Information:
     Net sales:
          Imported Beer and Spirits
              Imported beer                   $776,006      $726,953      7%
              Spirits                          282,307       274,702      3%
                   Net sales                $1,058,313    $1,001,655      6%
          Popular and Premium Wine
              Branded                         $692,664      $706,570     -2%
              Other                             56,760        71,469    -21%
                   Net sales                  $749,424      $778,039     -4%
          U.K. Brands and Wholesale
              Branded                         $229,472      $224,365      2%
              Wholesale                        560,346       495,532     13%
                   Net sales                  $789,818      $719,897     10%
          Fine Wine                           $155,758      $131,914     18%
          Intersegment eliminations           $(21,701)     $(24,747)   -12%
     Consolidated net sales                 $2,731,612    $2,606,758      5%

     Operating income:
          Imported Beer and Spirits           $217,963      $186,989     17%
          Popular and Premium Wine             112,479       113,705     -1%
          U.K. Brands and Wholesale             56,577        53,211      6%
          Fine Wine                             55,515        43,419     28%
          Corporate Operations                 (32,812)      (27,544)    19%
     Consolidated operating income            $409,722      $369,780     11%

     (a) Reflects the adoption of EITF 01-09.  Prior-period has been
         reclassified to comply with this guidance.

     (b) Excludes restructuring charges and gain on change in fair value of
         derivative instruments for Fiscal 2003, and
            excludes extraordinary charge in Fiscal 2002 and reflects the
            impact of SFAS 142 as if it had been adopted as of
            March 1, 2001.


                   CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
                           SUPPLEMENTAL FINANCIAL DATA
                     PACIFIC WINE PARTNERS JOINT VENTURE (a)
                                  (in thousands)

                                        For the         For the
                                         Three           Three
                                         Months          Months
                                         Ended           Ended
                                       February 28,   February 28,  Percent
                                          2003           2002        Change

     Net sales                           $26,905        $19,242        40%

     Operating income                     $4,331           $847       411%

                                       For the Year   For the Year
                                          Ended           Ended
                                       February 28,   February 28,   Percent
                                           2003           2002        Change

     Net sales                          $111,272        $41,581       168%

     Operating income                    $24,179         $3,000       706%

     (a) Pacific Wine Partners commenced operations August 2001.


                  CONSTELLATION BRANDS, INC. AND SUBSIDIARIES
        RECONCILIATION OF REPORTED AND COMPARABLE FINANCIAL INFORMATION
                     (in thousands, except per share data)

     (1) Reconciliation from reported operating income, net income and
         diluted earnings per share to comparable operating income, net income
         and diluted earnings per share for Fourth Quarter 2003 and Fourth
         Quarter 2002

                                             For the      For the
                                              Three        Three
                                              Months       Months
                                              Ended        Ended
                                           February 28, February 28, Percent
                                               2003         2002      Change

     Reported operating income                $85,323      $74,734      14%
          SFAS 142 - Adjustment for
           amortization                         --           7,914       N/A
          Restructuring charges                 4,764        --          N/A
     Comparable operating income              $90,087      $82,648       9%

     Reported net income                      $52,021      $27,001      93%
          SFAS 142 - Adjustment for
           amortization, net of income
           taxes                                --           5,297       N/A
          Restructuring charges, net of
           income taxes                         2,892        --          N/A
          Gain on change in fair value of
           derivative instruments,
               net of income taxes            (14,039)       --          N/A
          Extraordinary item, net of
           income taxes                         --           1,554       N/A
     Comparable net income                    $40,874      $33,852      21%

     Reported earnings per common share -
      diluted                                   $0.56        $0.30      87%
          SFAS 142 - Adjustment for
           amortization, net of income
           taxes                                 -            0.05       N/A
          Restructuring charges, net of
           income taxes                          0.03         -          N/A
          Gain on change in fair value of
           derivative instruments,
           net of income taxes                  (0.15)        -          N/A
          Extraordinary item, net of
           income taxes                          -            0.02       N/A
     Comparable earnings per common share
      - diluted                                 $0.44        $0.37      19%

     Weighted average common shares
      outstanding - diluted                    93,209       90,773       3%

     (2) Reconciliation from reported operating income, net income and diluted
         earnings per share to comparable operating income, net income and
         diluted earnings per share for Fiscal 2003 and Fiscal 2002

                                          For the Year  For the Year
                                              Ended        Ended
                                           February 28, February 28,  Percent
                                               2003         2002       Change

     Reported operating income               $404,958     $342,481      18%
          SFAS 142 - Adjustment for
           amortization                         --          27,299       N/A
          Restructuring charges                 4,764        --          N/A
     Comparable operating income             $409,722     $369,780      11%

     Reported net income                     $203,306     $136,421      49%
          SFAS 142 - Adjustment for
           amortization, net of income
           taxes                                --          18,946       N/A
          Restructuring charges, net of
           income taxes                         2,892        --          N/A
          Gain on change in fair value of
           derivative instruments,
               net of income taxes            (14,039)       --          N/A
          Extraordinary item, net of
           income taxes                         --           1,554       N/A
     Comparable net income                   $192,159     $156,921      22%


     Reported earnings per common share -
      diluted                                   $2.19        $1.55      41%
          SFAS 142 - Adjustment for
           amortization, net of income
           taxes                                --            0.22       N/A
          Restructuring charges, net of
           income taxes                          0.03        --          N/A
          Gain on change in fair value of
           derivative instruments,
           net of income taxes                  (0.15)       --          N/A
          Extraordinary item, net of
           income taxes                         --            0.02       N/A
     Comparable earnings per common share
      - diluted                                 $2.07        $1.79      16%

     Weighted average common shares
      outstanding - diluted                    92,746       87,825       6%

     (3) Reconciliation from net cash provided by operating activities to
        adjusted EBITDA

                                           For the Year For the Year
                                              Ended        Ended
                                           February 28, February 28, Percent
                                               2003         2002      Change
     Net cash provided by operating
      activities                             $236,142     $213,299      11%
          Provision for income taxes          131,630       91,984
          Interest expense, net               105,387      114,189
          Change in operating assets and
           liabilities                         20,406       13,029
          Equity in earnings of joint
           venture                             12,236        1,667
          Deferred tax provision              (21,095)      (3,675)
          Other non-cash items                 (2,659)        (941)
     Adjusted EBITDA                         $482,047     $429,552      12%

     (4) Reconciliation from net cash provided by operating activities to free
         cash flow from operations

                                           For the Year For the Year
                                              Ended        Ended
                                           February 28, February 28, Percent
                                               2003         2002      Change
     Net cash provided by operating
      activities                             $236,142     $213,299      11%
          Purchases of property, plant
           and equipment                      (71,575)     (71,148)      1%
     Free cash flow from operations          $164,567     $142,151      16%

     (5) Reconciliation of reported operating income to comparable operating
         income for Popular and Premium Wine segment for Fourth Quarter 2003
         and Fiscal 2003

                                           For the Three        For the Year
                                            Months Ended           Ended
                                         February 28, 2003   February 28, 2003

     Reported operating income                $27,907             $107,715
         Restructuring charges                  4,764                4,764
     Comparable operating income              $32,671             $112,479


     (6) Reconciliation of reported operating income to comparable operating
         income by segment for Fourth Quarter 2002 and Fiscal 2002

                                              For the Three Months Ended
                                                  February 28, 2002

                                                       SFAS 142
                                            Reported  Adjustment  Comparable
     Operating income:
          Imported Beer and Spirits          $35,571     $2,018     $37,589
          Popular and Premium Wine            29,075      3,378      32,453
          U.K. Brands and Wholesale            7,113      1,484       8,597
          Fine Wine                           10,854      1,034      11,888
          Corporate Operations                (7,879)     --         (7,879)
     Consolidated operating income           $74,734     $7,914     $82,648



                                         For the Year Ended February 28, 2002

                                                      SFAS 142
                                            Reported  Adjustment  Comparable
     Operating income:
          Imported Beer and Spirits         $178,805     $8,184    $186,989
          Popular and Premium Wine           104,781      8,924     113,705
          U.K. Brands and Wholesale           47,270      5,941      53,211
          Fine Wine                           39,169      4,250      43,419
          Corporate Operations               (27,544)     --        (27,544)
     Consolidated operating income          $342,481    $27,299    $369,780

     (7) Reconciliation of reported selling, general and administrative
         expenses to comparable selling, general and administrative expenses
         for Fourth Quarter 2002 and Fiscal 2002


                                         For the Three         For the Year
                                          Months Ended            Ended
                                       February 28, 2002     February 28, 2002
     Reported SG&A                          $88,137               $352,679
         SFAS 142                            (7,914)               (27,299)
     Comparable SG&A                        $80,223               $325,380

     (8) Reconciliation from forecasted range of diluted earnings per share
         under GAAP to comparable forecasted range of diluted earnings per
         share for First Quarter 2004

                                                Range for the Three Months
                                                      Ended May 31, 2003
     Forecasted earnings per common share - diluted   $0.41       $0.43
          Restructuring charges, net of income taxes   0.03        0.03
          Loss on change in fair value of derivative
            instruments, net of income taxes           0.01        0.01
          Acquisition financing charges, net of
            income taxes                               0.01        0.01
     Comparable forecasted earnings per common
       share - diluted                                $0.46       $0.48

     (9) Reconciliation from forecasted range/reported operating income under
         GAAP to comparable forecasted range/comparable operating income for
         Fiscal 2004 and Fiscal 2003
                                                                  For the Year
                                            Range for the Year        Ended
                                         Ended February 29, 2004  February 28,
                                                                       2003
     Forecasted/reported operating income   $542,000    $562,000    $404,958
          Restructuring charges                9,000       9,000       4,764
          Acquisition financing charges        9,000       9,000          --
     Comparable forecasted/comparable
      operating income                      $560,000    $580,000    $409,722