Constellation Brands Reports Second Quarter Fiscal 2013 Results

• Achieves comparable basis diluted EPS of $0.71 and reported basis diluted EPS of $0.67

• Results include lower than expected tax rate

• Updates fiscal 2013 outlook; expects comparable basis diluted EPS of $2.00 - $2.10 and reported basis diluted EPS of $1.87 - $1.97

• Increases free cash flow target; new target range set at $450 - $500 million for fiscal 2013

• Acquisition of remaining 50 percent interest in Crown Imports targeted to close first quarter calendar 2013; secures financing during second quarter

^{*Definitions of reported and comparable, 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

VICTOR, N.Y., Oct. 5, 2012 - Constellation Brands, Inc. (CBI) (NYSE: STZ and STZ.B), the world's leading premium wine company, reported today its second quarter 2013 results.

"As we execute our profitable, organic growth strategy, we are encouraged by the strength of our core beer, wine and spirits businesses including the success of our new product introductions and innovation pipeline across our entire portfolio of outstanding brands," said Rob Sands, president and chief executive officer, CBI. "We remain excited about the prospect of owning 100 percent of Crown Imports, which represents a transformational step for our company as it will solidify Constellation's position in the U.S. beer industry for the long term. This transaction is still targeted to close during the first quarter of calendar 2013."

Net Sales Commentary

Wine and spirits net sales on an organic constant currency basis were even with the prior year second quarter and reflected an increase in volume, primarily offset by higher promotional costs.

"I am pleased with our strong marketplace performance during the quarter especially in the SymphonyIRI channels where our excellent brand portfolio is currently outperforming the market," said Sands. "As expected, our enhanced, yet disciplined marketing and promotional efforts are paying off. Some of our new brands including Simply Naked, Primal Roots and The Dreaming Tree, recently received Impact Hot Prospect Awards and on the spirits side, we are seeing excellent consumer response to the launches of SVEDKA Colada flavored vodka and Black Velvet Toasted Caramel whisky."

Operating Income and Net Income Commentary

The decrease in consolidated comparable basis operating income was driven primarily by increased SG&A expenses and a planned increase in promotional spending for the company's U.S. wine and spirits business, due in part to support innovation initiatives.

The company's equity earnings from its 50 percent interest in the Crown joint venture totaled $71 million compared to $63 million from the prior year second quarter. For second quarter 2013, Crown generated net sales of $788 million, an increase of eight percent, and operating income of $143 million, an increase of 14 percent. The increase in net sales and operating income was primarily driven by volume growth.

"The second quarter marks the tenth consecutive quarter that Crown has outperformed the U.S. beer industry and the import category driven by strong portfolio performance led by Modelo Especial," said Sands. "Crown's marketplace execution is also being fueled by creative advertising and retail programs including the 'Win Your Beach' sweepstakes promotion, Corona's 'Find Your Beach' campaign and Corona Light's new 'Refreshing Change of Beer' ads."

Interest expense totaled $55 million, an increase of 28 percent. The increase was primarily due to higher average borrowings and an increase in average interest rates.

The comparable basis effective tax rate for second quarter 2013 was 16.3 percent compared to a 3.1 percent rate for the prior year second quarter. Both periods reflect favorable benefits from various tax items. The company now anticipates the full year effective tax rate for fiscal 2013 to approximate 30 percent, which is the primary driver of the improved comparable basis diluted EPS guidance for the year.

Free Cash Flow Commentary

Free cash flow for the first six months of fiscal 2013 totaled $333 million as compared to $478 million for the same period last year. The decrease was primarily due to the receipt of tax refunds in the prior year period.

"During the second quarter, we secured permanent financing for the Crown transaction," said Bob Ryder, chief financial officer, CBI. "As part of this activity, we took advantage of our improved credit profile and an attractive interest rate environment by issuing $650 million of 4.625% Senior Notes due March 2023. At the same time, we amended our senior credit facility to establish a $575 million delayed draw term loan. We plan to use our revolving credit facility and available cash for the remaining funding requirements for the Crown transaction."

"Given the early funding related to the senior notes issuance, the company now anticipates interest expense for fiscal 2013 to be in the range of $225 to $235 million, an increase of $15 million versus prior guidance. Despite the increased interest expense, our strong first half operating cash flow results provide enough visibility to increase our fiscal 2013 free cash flow expectations," Ryder concluded.

Outlook

The table below sets forth management's current diluted EPS expectations for fiscal 2013 compared to fiscal 2012 actual results, both on a reported basis and a comparable basis.

Full-year fiscal 2013 guidance includes the following current assumptions, but excludes any impact from the closing of the purchase of the remaining 50 percent interest in the Crown Imports joint venture:

• Interest expense: approximately $225 - $235 million

• Tax rate: approximately 30 percent

• Weighted average diluted shares outstanding: approximately 190 million

• Free cash flow: approximately $450 - $500 million

Conference Call

A conference call to discuss second quarter 2013 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 Fri., Oct. 5, 2012 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 the company'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, comparable basis effective tax rate 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, Inc.

As the world's leader in premium wine, Constellation Brands, Inc. (NYSE: STZ, STZ:B) is a S&P 500 Index and a Fortune 1000® company with 4,400 employees, sales in 100 countries and operations in 40 facilities worldwide. The company manages a broad portfolio of more than 100 wines, beers and spirits that include: Robert Mondavi, Clos du Bois, Kim Crawford, Inniskillin, Franciscan Estate, Mark West, Ruffino, Simi, Estancia, Corona Extra, Black Velvet Canadian Whisky and SVEDKA Vodka. Learn more at www.cbrands.com.

Forward-Looking Statements

The statements made under the heading Outlook, and all statements other than statements of historical fact set forth in this news release regarding Constellation Brands' 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 Brands may reiterate the Projections. Prior to the start of the company's quiet period, which will begin at the close of business on Nov. 30, 2012, the public can continue to rely on the Projections as still being Constellation Brands' current expectations on the matters covered, unless the company publishes a notice stating otherwise. During Constellation Brands' "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. The Projections should not be construed in any manner as a guarantee that such results will in fact occur. The transaction between Constellation Brands and Anheuser-Busch InBev SA/NV regarding the purchase by Constellation Brands of the 50% portion of Crown Imports LLC which Constellation Brands does not already own (the "Crown Acquisition") is subject to the satisfaction of certain closing conditions, including receipt of necessary regulatory approvals and the consummation of certain transactions between Anheuser-Busch InBev SA/NV and Grupo Modelo, S.A.B. de C.V., and certain of its affiliates (the "Modelo Transaction"). There can be no assurance the Crown Acquisition will occur or will occur on the timetable projected by the company. The availability of financing under the company's senior credit facility is subject to satisfaction of the terms and conditions contained in the underlying documents.

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:

• completion of the Modelo Transaction;

• completion of the Crown Acquisition; the availability of financing for the Crown Acquisition under the expected terms; and the accuracy of projections relating to the Crown Acquisition;

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

• 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. 29, 2012, as supplemented by the company's Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2012, which could cause actual future performance to differ from current expectations.