Constellation Brands Inc. : Reports Third Quarter Fiscal 2012 Results

• Achieves comparable basis diluted EPS of $0.50 and reported basis diluted EPS of $0.52

• Strong free cash flow generation drives $100 million increase to annual guidance; new target range set at $700-$750 million

• Repurchases 5.2 million shares for $94 million during the quarter; repurchases 15 million shares for $281 million during first nine months of fiscal 2012

• Reaffirms fiscal 2012 comparable basis diluted EPS of $2.00 - $2.10; updates reported basis diluted EPS to $1.96 - $2.06

VICTOR, N.Y., Jan. 5, 2012 - Constellation Brands, Inc. (NYSE: STZ), the world's leading premium wine company, reported today its third quarter 2012 results.

"Our third quarter results were generally consistent with our expectations for the business and reflect continuing progress particularly in the areas of free cash flow generation and improving depletion trends for our U.S. wine and spirits business. I am especially pleased with the ongoing momentum from our new product development and brand building initiatives," said Rob Sands, president and chief executive officer, Constellation Brands.

^{*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 period intercompany net sales are added back to the prior period reported net sales for comparison purposes.}

Net Sales Commentary

Reported consolidated net sales decreased 27 percent due primarily to the divestiture of the Australian and U.K. wine business.

North American net sales on an organic constant currency basis decreased eight percent primarily due to a decrease in volume driven largely by the overlap of distributor inventory build in the third quarter last year as part of the U.S. distributor consolidation initiative. "However, we are on track to meet our comparable basis EPS goal for the year and expect to see improving sales trends in the fourth quarter," said Sands. "We are experiencing improving depletion and marketplace performance driven by our focus brands and new products including Simply Naked, Primal Roots, The Dreaming Tree, Rex Goliath Moscato, Woodbridge Malbec, Ruffino Prosecco and Arbor Mist Pomegranate Berry Pinot Noir."

Operating Income and Net Income Commentary

The decrease in consolidated comparable basis operating income was driven primarily by lower volume in North America, partially offset by lower corporate expenses.

Constellation's equity earnings from its 50 percent interest in the Crown Imports joint venture totaled $43 million, a decrease of 25 percent from the prior year. For third quarter 2012, Crown generated net sales of $541 million, a decrease of 12 percent, and operating income of $87 million, a decrease of 25 percent. The decrease in net sales for Crown was primarily driven by lower volume due to the overlap of the prior year third quarter distributor inventory rebuild subsequent to the supply chain issues experienced during the summer of 2010. Operating income decreased primarily as a result of the lower volume and higher marketing spend.

"During the third quarter, depletions increased mid-single digits driven by Modelo Especial, Victoria and Corona Familiar," said Sands. "Crown had great success with enhanced marketing efforts related to the "Find Your Beach" advertising campaign and incremental investments during the National Football League season. Crown continues to outperform the industry, the import category and other major suppliers in the marketplace."

For third quarter 2012, pre-tax restructuring charges and unusual items totaled a benefit of $8 million compared to expense of $6 million for the prior year third quarter.

Interest expense totaled $46 million, a decrease of six percent. The decrease was primarily due to lower average borrowings.

The comparable basis effective tax rate for the quarter was 37 percent compared to a 29 percent rate for the prior year third quarter, which reflected the favorable outcome of various tax items.

Free Cash Flow and Common Stock Repurchases Commentary

Free cash flow for nine months 2012 totaled $587 million. During third quarter 2012, the company repurchased 5.2 million shares of common stock at a cost of $94 million. The company has purchased 15 million shares at a cost of $281 million during nine months 2012.

"The company has increased its fiscal 2012 free cash flow target by $100 million to a range of $700 to $750 million," said Bob Ryder, chief financial officer, Constellation Brands. "Our continued strong free cash flow generation enabled us to reduce our debt, fund the stock repurchases and acquire the remaining 50.1 percent interest in the Ruffino business."

Outlook

The table below sets forth management's current diluted EPS expectations for fiscal 2012 compared to fiscal 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 subsequent to Nov. 30, 2011:

• Interest expense: approximately $180 - $185 million

• Tax rate: approximately 27 percent

• Weighted average diluted shares outstanding: approximately 209 million

• Free cash flow: approximately $700 - $750 million

Conference Call

A conference call to discuss third 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., Jan. 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 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, Ruffino, Jackson-Triggs, Inniskillin, 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 100 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 Feb. 29, 2012, 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. 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:

• the exact duration of the share repurchase implementation; and the amount and timing of any 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. 28, 2011, which could cause actual future performance to differ from current expectations.

Investor Relations
Patty Yahn-Urlaub - 585-678-7483
Bob Czudak - 585-678-7170