• Achieves reported basis EPS of $1.98 and comparable basis EPS of $1.96, an increase of 49% and 38%, respectively
• Results reflect strong operating performance and include favorable tax rate benefit driven by reinvestment of certain foreign earnings (APB 23)
• Generates $1.42 billion of operating cash flow and $824 million of free cash flow
• Increases fiscal 2017 outlook; expects reported basis EPS of $7.55 - $7.65 and comparable basis EPS of $6.55 - $6.65 primarily reflecting lower tax rate projection
• Affirms fiscal 2017 free cash flow projection of $575 - $675 million
• Completes acquisitions of High West and Charles Smith in October 2016 and Obregon brewery in December 2016
• Completes sale of Canadian wine business in December 2016
• Repurchases 2.4 million shares of common stock for $367 million during third quarter fiscal 2017; repurchases 5.4 million shares of common stock for $823 million during fiscal 2017 through December 31, 2016
• Declares quarterly cash dividend

*Definitions of reported and comparable, as well as reconciliations of non-GAAP financial measures, are contained elsewhere in this news release.
NA=Not Applicable

VICTOR, N.Y., Jan. 5, 2017 - Constellation Brands, Inc. (NYSE: STZ and STZ.B), a leading beverage alcohol company, reported today its third quarter fiscal 2017 results.

"It has been another dynamic quarter for our business and I am proud of our impressive financial results and recent accomplishments," said Rob Sands, president and chief executive officer, Constellation Brands. "We sold our Canadian wine business as part of our strategy to focus on premium, margin accretive, growth opportunities. We increased our functioning brewery capacity and innovation flexibility to support our fast-growing, high-end Mexican beer portfolio with the purchase of the Obregon brewery operation in Mexico. We strengthened our premium wine and spirits portfolio with the acquisitions of Charles Smith Wines and High West Distillery, and we repurchased a significant number of our shares. Our business has never been stronger and the future prospects across our beer, wine and spirits portfolio are compelling," said Sands.

Net Sales Commentary

For the quarter, the company generated consolidated net sales growth of 10 percent. This reflects organic net sales growth on a constant currency basis of seven percent and acquisition benefits.

Net sales for beer increased 16 percent. This was due to a 12 percent increase in organic net sales driven primarily by volume growth and favorable pricing, and the acquisition benefit from Ballast Point.

"Our beer business delivered double-digit sales and profit growth for the third quarter, and gained significant market share of the high-end of the U.S. beer category, as the #1 contributor to growth, with our key brands growing across all market channels," said Sands.

Wine and spirits net sales increased five percent. This primarily reflects the acquisition benefit from The Prisoner wine brands and favorable mix, partially offset by lower volume due to timing, as U.S. depletion volume outpaced shipment volume during the quarter.

"During the quarter, our wine business gained IRI volume and dollar share driven by strong depletion growth for our Focus Brands, and became the #1 share gainer in the U.S. wine category. We also successfully integrated Charles Smith and High West into our portfolio. We're driving strong growth trends for these brands, which are enabling us to capitalize on U.S. market trends that favor high-end wine and spirits," said Sands.

Operating Income and Income Tax Commentary

For the quarter, consolidated reported and comparable basis operating income increased 19 percent and 12 percent, respectively.

Third quarter fiscal 2017 comparable adjustments affecting operating income totaled a net gain of $2 million as compared to a net loss of $29 million for the same period last year.

Beer operating income increased 15 percent, primarily due to organic volume growth and favorable pricing, partially offset by higher marketing investment. The four percent increase in wine and spirits operating income primarily reflects favorable mix, the benefit from The Prisoner acquisition and favorable COGS, partially offset by higher investment in SG&A and marketing, as well as lower volumes.

The effective tax rate for third quarter fiscal 2017 was 16 percent versus 32 percent for the prior year third quarter. During third quarter fiscal 2017, the company determined that a portion of the earnings of certain foreign subsidiaries would be indefinitely reinvested (APB 23). This assertion allows the company to record income taxes on certain foreign earnings using the applicable foreign jurisdiction tax rates, rather than the higher U.S. tax rate. The fiscal 2017 year-to-date impact of this change was recorded in third quarter fiscal 2017. The effective tax rate for nine months fiscal 2017 was 27 percent. For fiscal 2017, the company expects the effective tax rate on a reported basis to approximate 26 percent, which reflects a tax benefit from the sale of the Canadian wine business, and the effective tax rate on a comparable basis to approximate 27 percent.

Operating Cash Flow and Free Cash Flow Commentary

For the first nine months of fiscal 2017, operating cash flow totaled $1.42 billion, an increase of 30 percent. Free cash flow for the first nine months of fiscal 2017 totaled $824 million, as compared to $578 million for the same period last year. This reflects higher operating cash flow, partially offset by higher capital expenditures.

"We are pleased with our strong operating cash flow results and we continue to target fiscal 2017 free cash flow in the range of $575 to $675 million," said David Klein, executive vice president and chief financial officer, Constellation Brands. "We recently achieved "Investment Grade" status, successfully completed a new senior notes offering at an attractive interest rate, and opportunistically repurchased a significant number of our shares. These activities continue to build shareholder value," added Klein.

Recent Business Activities

In October 2016, the company completed the acquisitions of High West for $137 million, net of cash acquired and subject to post-closing adjustments, and Charles Smith for $121 million.

In December 2016, the company completed the purchase of the Obregon, Mexico brewery operation from Grupo Modelo, a subsidiary of Anheuser-Busch InBev SA/NV for $583 million, net of cash acquired and subject to post-closing adjustments.

The company also completed the sale of its Canadian wine business to Ontario Teachers' Pension Plan in December 2016. The transaction was valued at C$1.04 billion ($776 million) and the company received cash proceeds, net of outstanding debt, of approximately C$775 million ($581 million), subject to post-closing adjustments. The company received the proceeds from the outstanding debt prior to the sale. The company expects to record a net gain in connection with this transaction during fourth quarter fiscal 2017 and after-tax proceeds are expected to approximate $511 million.

For nine months fiscal 2017, net sales and operating income that will no longer be part of the wine and spirits segment results after the sale of the Canadian wine business totaled $289 million and $45 million, respectively. This compares to $284 million of net sales and $48 million of operating income for nine months fiscal 2016. For fiscal 2016, net sales and operating income for the divested business totaled $365 million and $63 million, respectively.

During the third quarter, Constellation Brands also made minority investments in Catoctin Creek Distilling Company, a producer of premium rye whisky and gin from organic sources, as well as Bardstown Bourbon Company, the largest new whiskey distillery in the U.S.

Share Repurchases

In November 2016, Constellation's board of directors authorized a new share repurchase program of up to $1 billion of the company's common stock. This new program was in addition to the company's then-existing $1 billion share repurchase program. During third quarter fiscal 2017, the company repurchased 2.4 million shares of common stock for $367 million. Through December 31, 2016, the company repurchased 5.4 million shares of common stock for $823 million. As of December 31, 2016, the company has fully utilized its prior $1 billion share repurchase authorization and has $847 million remaining under its new share repurchase authorization.

Quarterly Dividend

On January 4, 2017, Constellation's board of directors declared a quarterly cash dividend of $0.40 per share of Class A Common Stock and $0.36 per share of Class B Common Stock, payable on February 23, 2017, to stockholders of record as of the close of business on February 9, 2017.

Outlook

The table below sets forth management's current EPS expectations for fiscal 2017 compared to fiscal 2016 actual results, both on a reported basis and a comparable basis.

For fiscal 2017, the beer business continues to expect net sales growth of 16 - 17 percent and operating income growth at the high teens level. These growth rates include an estimated incremental benefit from the Ballast Point acquisition. For the wine and spirits business, the company continues to expect net sales growth in the mid single-digit range and operating income growth in the mid to high single-digit range. These growth rates include an estimated incremental benefit from the Meiomi, Prisoner, High West and Charles Smith acquisitions, net of the Canadian wine business divestiture.

Fiscal 2017 guidance also includes the following current assumptions:

• Interest expense: approximately $335 - $345 million
• Tax rate: reported basis approximately 26%, which reflects a tax benefit from the sale of the Canadian wine business; comparable basis approximately 27%
• Weighted average diluted shares outstanding: 204.5 million
• Operating cash flow: approximately $1.4 - $1.6 billion
• Capital expenditures: approximately $825 - $925 million
• Free cash flow: approximately $575 - $675 million

Conference Call

A conference call to discuss third quarter fiscal 2017 results and outlook will be hosted by President and Chief Executive Officer Rob Sands and Executive Vice President and Chief Financial Officer David Klein on Thursday, Jan. 5, 2017 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, effective tax rate, net income and EPS are as reported under generally accepted accounting principles. Operating income, effective tax rate, net income and EPS on a comparable basis ("comparable"), exclude items that affect comparability ("comparable adjustments"), as they are not reflective of core operations of the segments. The company's measure of segment profitability excludes comparable adjustments, 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.

About Constellation Brands
Constellation Brands (NYSE: STZ and STZ.B), a Fortune 500® company, is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Canada, Mexico, New Zealand and Italy. Constellation is the No. 3 beer company in the U.S. with high-end, iconic imported brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico. The company's beer portfolio also includes Ballast Point, one of the most awarded craft brewers in the U.S. In addition, Constellation is the world leader in premium wine, selling great brands that people love, including Robert Mondavi, Clos du Bois, Kim Crawford, Meiomi, Mark West, Franciscan Estate, Ruffino and The Prisoner. The company's premium spirits brands include SVEDKA Vodka, Casa Noble Tequila and High West Whiskey.

Based in Victor, N.Y., the company believes that industry leadership involves a commitment to brand building, our trade partners, the environment, our investors and to consumers around the world who choose our products when celebrating big moments or enjoying quiet ones. Founded in 1945, Constellation has grown to become a significant player in the beverage alcohol industry with more than 100 brands in its portfolio, about 40 facilities and approximately 8,000 talented employees. We express our company vision: to elevate life with every glass raised. To learn more, visit 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, expected effective tax rate, estimated diluted EPS, expected cash flow, future payments of dividends, prospects, plans and objectives of management, including the duration of reinvestment of earnings of certain foreign subsidiaries, manner and timing of share repurchases, 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 Feb. 28, 2017, 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.

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:

• Mexicali brewery construction, Nava brewery expansion and Obregon brewery optimization activities and joint venture glass plant expansion activities take place with expected scope, on expected terms and timetables, and with receipt of any necessary permits and regulatory approvals;
• accuracy of supply projections, including those relating Mexicali brewery construction, Nava brewery expansions, Obregon brewery optimization, and glass sourcing;
• timeframe and actual costs associated with beer supply, Mexicali brewery construction, Nava brewery expansions, Obregon brewery optimization and glass sourcing, including joint venture glass plant expansions, may vary from management's current expectations due to market conditions, the company's cash and debt position, and other factors as determined by management;
• operating cash flow, free cash flow, effective tax rate and capital expenditures to support long-term growth may vary from management's current estimates;
• timing and volume amount of beer shipments to wholesalers may vary from current expectations due to actual consumer demand;
• accuracy of projections associated with the acquisitions of the Meiomi wine brand, Ballast Point, The Prisoner Wine Company brand portfolio, High West, the Charles Smith Wine Collection, and the Obregon brewery and the projections associated with the sale of the Canadian wine business;
• the impact of and the ability to realize the anticipated benefits of acquisitions, including as a result of difficulty in integrating the businesses of the companies involved;
• the exact duration of the share repurchase implementation and the amount, timing and source of funds of any additional share repurchases;
• amount and timing of future dividends are subject to the determination and discretion of the Board of Directors;
• ability to use cash flow to fund dividends and acquisitions could be affected by unanticipated increases in net total debt, inability to generate cash flow at the levels anticipated, and failure to generate expected earnings;
• raw material and water 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, domestic, international and regulatory conditions, instability in world financial markets, or unanticipated environmental liabilities and costs;
• changes to international trade agreements and tariffs, 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;
• accuracy of the bases for forecasts relating to joint ventures and associated costs, losses, purchase obligations and capital investment requirements; 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, 2016, which could cause actual future performance to differ from current expectations.

CONTACTS
Media
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Investor Relations
Patty Yahn-Urlaub: 585-678-7483
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