Constellation Brands Reports First Quarter Fiscal 2012 Results

• Achieves comparable basis diluted EPS of $0.39 and reported basis diluted EPS of $0.35

• Generates strong free cash flow of $220 million; reaffirms fiscal 2012 free cash flow target of $600 - $650 million

• Decreases debt by $244 million

• Implements restructuring initiative to gain efficiencies

• Updates fiscal 2012 outlook: comparable basis diluted EPS of $1.90 - $2.00 remains unchanged, expects reported basis diluted EPS of $1.82 - $1.92

VICTOR, N.Y., June 30, 2011 - Constellation Brands, Inc. (NYSE: STZ), the world's leading premium wine company, reported today its first quarter 2012 results.

"I am pleased with our first quarter financial performance which was generally in-line with our expectations. Highlights for the quarter include greatly improved operating margin and favorable U.S. product mix, strong free cash flow and ongoing debt reduction. We believe focused marketing efforts at Crown are driving momentum in the beer business," said Rob Sands, president and chief executive officer, Constellation Brands. "With the sale of our Australian and U.K. business, we have significantly improved our financial profile and simplified our business. As a result, we are taking the next logical step to increase efficiencies and streamline our operations worldwide."

*Definitions of reported, comparable, organic and constant currency, as well as reconciliations of non-GAAP financial measures, are contained elsewhere in this news release.
** Hereafter referred to as "equity earnings."
NA=Not applicable
(1) Prior to the divestiture of the Australian and U.K. business, net sales from CWNA to CWAE were eliminated as intercompany net sales. Subsequent to the divestiture, these net sales are now recorded as third party net sales. Accordingly, the prior intercompany net sales are added back to the prior reported net sales for comparison purposes.

Net Sales Commentary

Reported consolidated net sales decreased 19 percent due primarily to the divestiture of the Australian and U.K. wine business.

North American net sales on an organic constant currency basis increased two percent primarily due to favorable product mix and lower promotion expense in the U.S., partially offset by a decrease in volume. "As expected, our first quarter depletions were somewhat muted due to recent price increases for some of our value and specialty brands and the timing of promotional activities for our U.S. wine and spirits portfolio," said Sands. "However, we remain committed to growing depletions at least in line with category growth on an annual basis while achieving our profit goals. This year's focus on innovation and new product development has already led to the successful launch of almost half of the planned new product introductions for the year including Rex Goliath Moscato, Ruffino Prosecco, Arbor Mist Pomegranate Berry Pinot Noir and the Simply Naked product line."

Operating Income and Net Income Commentary

The increase in consolidated comparable basis operating income was driven by reduced corporate costs, an improvement in the North American operating results and the divestiture of the Australian and U.K. business, which generated an operating loss in the first quarter last year.

Constellation's equity earnings from its 50 percent interest in the Crown Imports joint venture totaled $60 million, an increase of 10 percent from the prior year. For first quarter 2012, Crown generated net sales of $678 million, an increase of nine percent, and operating income of $120 million, an increase of 10 percent. The increase in net sales and operating income for Crown was primarily driven by volume growth due in part to the ongoing launch of the Victoria brand. Net sales and operating income also benefited from improvement in net pricing and product mix, partially offset by increased marketing spend.

"Crown's marketplace momentum continued during the first quarter as it outperformed the industry and import category driven by key marketing initiatives for Cinco de Mayo and the launch of the second consecutive 'Win the Beach Getaway Sweepstakes,'" said Sands. "In addition, distributor inventories are better positioned this year versus last year heading into the important summer selling season."

For first quarter 2012, pre-tax restructuring charges and unusual items totaled $14 million compared to $7 million for the prior year first quarter.

Interest expense totaled $44 million, a decrease of nine percent. The decrease was primarily due to lower average borrowings.

The comparable basis effective tax rate for the quarter was 37 percent and compares to a 24 percent rate for the prior year first quarter which reflected the favorable outcome of various tax items.

During first quarter 2012, the company began to implement operational changes to further align the business, increase efficiencies and reduce its cost structure following the sale of its Australian and U.K. business. Constellation anticipates generating cost savings from this initiative of more than $10 million, the majority of which is expected to be realized in fiscal 2013. These savings include synergies gained primarily from realigning certain administrative, operational and commercial functions on a global basis.

In connection with this initiative, the company expects to incur one-time cash charges of approximately $26 million. Nearly all of the charges are expected to be recognized during fiscal 2012.

Free Cash Flow Commentary

Free cash flow for the quarter totaled $220 million. "Our strong free cash flow generation helped drive a $244 million decrease in debt and reduce our debt to comparable basis EBITDA ratio to the low three times range at the end of the fiscal quarter," said Bob Ryder, chief financial officer, Constellation Brands. "For fiscal 2012, the company is on target to achieve free cash flow in the range of $600 to $650 million, including the funding of the restructuring program."

Outlook

The table below sets forth management's current diluted EPS expectations for fiscal year 2012 compared to fiscal year 2011 actual results, both on a reported basis and a comparable basis.

Constellation Brands Fiscal Year 2012
Diluted Earnings Per Share Outlook

Full-year fiscal 2012 guidance includes the following current assumptions but excludes any impact from any repurchases of the company's common stock:

• Interest expense: approximately $180 - $190 million

• Tax rate: approximately 29 percent

• Weighted average diluted shares outstanding: approximately 216 million

• Free cash flow: $600 - $650 million

Conference Call

A conference call to discuss first quarter 2012 results and outlook will be hosted by President and Chief Executive Officer Rob Sands and Executive Vice President and Chief Financial Officer Bob Ryder on Thurs., June 30, 2011 at 10:30 a.m. (eastern). The conference call can be accessed by dialing +973-935-8505 beginning 10 minutes prior to the start of the call. A live listen-only webcast of the conference call, together with a copy of this news release (including the attachments) and other financial information that may be discussed during the call will be available on the Internet at Constellation's website: www.cbrands.com under "Investors," prior to the call.

Explanations

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

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

Supplemental Financial Information

Tables reconciling non-GAAP measures, together with definitions of these measures and the reasons management uses these measures, are attached to and are part of this news release. Please see the link below.

About Constellation Brands

Constellation Brands is the world's leading premium wine company that achieves success through an unmatched knowledge of wine consumers, storied brands that suit varied lives and tastes, and talented employees worldwide. With a broad portfolio of widely admired premium products across the wine, beer and spirits categories, Constellation's brand portfolio includes Robert Mondavi, Clos du Bois, Blackstone, Arbor Mist, Estancia, Ravenswood, Jackson Triggs, Kim Crawford, Corona Extra, Black Velvet Canadian Whisky and SVEDKA Vodka.

Constellation Brands (NYSE: STZ and STZ.B) is a S&P 500 Index and Fortune 1000® company with more than 100 brands in our portfolio, sales in about 125 countries and operations in approximately 30 facilities. The company believes that industry leadership involves a commitment to our brands, to the trade, to the land, to investors and to different people around the world who turn to our products when celebrating big moments or enjoying quiet ones. We express this commitment through our vision: to elevate life with every glass raised. To learn more about Constellation, visit the company's website at www.cbrands.com.

Forward-Looking Statements

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

During the current quarter, Constellation may reiterate the Projections. Prior to the start of the company's quiet period, which will begin at the close of business on Aug. 31, 2011, the public can continue to rely on the Projections as still being Constellation's current expectations on the matters covered, unless Constellation publishes a notice stating otherwise. During Constellation's "quiet period," the Projections should not be considered to constitute the company's expectations and should be considered historical, speaking as of prior to the quiet period only and not subject to update by the company.

The Projections are based on management's current expectations and, unless otherwise noted, do not take into account the impact of any future acquisition, merger or any other business combination, divestiture, restructuring or other strategic business realignments, financing or share repurchase that may be completed after the date of this release. There can be no assurance that a settlement of matters relating to a put option in Ruffino S.r.l. will occur. The Projections should not be construed in any manner as a guarantee that such results will in fact occur.

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

• actual costs associated with any settlement regarding Ruffino S.r.l.;

• the exact duration of the share repurchase implementation; and the amount and timing of any share repurchases;

• completion of various portfolio actions; implementation of consolidation activities and actual U.S. distributor transition experience;

• achievement of all expected cost savings from the company's various restructuring plans and realization of expected asset sale proceeds from the sale of inventory and other assets;

• accuracy of the bases for forecasts relating to joint ventures and associated costs, losses, purchase obligations and capital investment requirements;

• restructuring charges and other one-time costs associated with restructuring plans may vary materially from management's current estimates due to variations in one or more of anticipated headcount reductions, contract terminations, costs or timing of plan implementation;

• raw material supply, production or shipment difficulties could adversely affect the company's ability to supply its customers;

• increased competitive activities in the form of pricing, advertising and promotions could adversely impact consumer demand for the company's products and/or result in lower than expected sales or higher than expected expenses;

• general economic, geo-political and regulatory conditions, prolonged downturn in the economic markets in the U.S. and in the company's major markets outside of the U.S., continuing instability in world financial markets, or unanticipated environmental liabilities and costs;

• changes to accounting rules and tax laws, and other factors which could impact the company's reported financial position, results of operations or effective tax rate;

• changes in interest rates and the inherent unpredictability of currency fluctuations, commodity prices and raw material costs; and

• other factors and uncertainties disclosed in the company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended Feb. 28, 2011, which could cause actual future performance to differ from current expectations.

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