CORRESP: A correspondence can be sent as a document with another submission type or can be sent as a separate submission.
Published on June 7, 2007
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[LOGO]
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Constellation
Brands, Inc.
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|
|
Constellation
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370
Woodcliff Drive, Suite 300
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Fairport,
New York 14450
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phone
585-218-3600
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fax
585-218-3601
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June
7,
2007
United
States Securities and Exchange Commission
Division
of Corporation Finance
100
F
Street, N.E., Mail Stop 3561
Washington,
D.C. 20549
Attention:
William Choi, Accounting Branch Chief
|
Re:
|
Securities
and Exchange Commission Comment Letter dated June 1, 2007, with regard
to:
|
| Constellation Brands, Inc. |
|
Form
10-K for the Fiscal Year Ended February 28, 2007 (the
“Filing”)
|
|
Filed
April 30, 2007
|
|
File
No. 1-08495
|
Dear
Mr.
Choi:
The
responses of Constellation Brands, Inc. (the “Company”) to the comments of the
staff contained in your letter dated June 1, 2007, are set forth below. For
the
convenience of the staff, the Company has formatted this letter such that the
Company repeats, in the same numbered order contained in your letter, each
comment with the Company’s response immediately following the numbered comment.
The Company intends that its responses to comments that request revised
disclosure will be reflected substantially as indicated below in its future
filings only.
In
connection with responding to the staff’s comments, the Company acknowledges
that the Company is responsible for the adequacy and accuracy of the disclosure
in the Company’s Filing, staff comments or changes to disclosure in response to
staff comments do not foreclose the Commission from taking any action with
respect to the Company’s Filing, and the Company may not assert staff comments
as a defense in any proceeding initiated by the Commission or any person under
the federal securities laws of the United States.
FORM
10-K FOR THE FISCAL YEAR ENDED FEBRUARY 28, 2007
Consolidated
Statements of Changes in Stockholders’ Equity, page 61
|
1.
|
It
appears you have included the SFAS 158 transition adjustment required
by
paragraph 16(a) of SFAS 158 in Other Comprehensive Income. Please
tell us
how the inclusion of the transition adjustment in Other Comprehensive
Income complies with paragraph A7 of SFAS
158.
|
Company
Response: The
Company did include the transition adjustment required by paragraph 16(a) of
SFAS No. 158 within Other Comprehensive Income in its Consolidated Statements
of
Changes in Stockholders’ Equity. The adjustments to initially apply SFAS No. 158
of $8.9 million, net of tax of $3.9 million, and $0.4 million, net of tax of
$0.2 million, are separately disclosed in Note 12, Profit Sharing and Retirement
Savings Plans, and Note 13, Postretirement Benefits, respectively, in the
Company’s Notes to Consolidated Financial Statements. As the amounts were not
material to Other Comprehensive Income and were disclosed elsewhere in the
Notes
to the Consolidated Financial Statements, the Company did not disclose the
adjustments to initially apply SFAS No. 158 in a separate line outside of Other
Comprehensive Income within the Consolidated Statements of Changes in
Stockholders’ Equity. The Company will revise its presentation in its next Form
10-K filing to conform with paragraph A7 of SFAS No. 158 and will include
separate line-item disclosure of the adjustments to initially apply SFAS No.
158
in its Consolidated Statements of Changes in Stockholders’ Equity as a component
of the ending balance of Accumulated Other Comprehensive Income, as
follows:
|
CONSTELLATION
BRANDS, INC. AND SUBSIDIARIES
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|||||||||||||||||||||||||
|
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
|
|||||||||||||||||||||||||
|
(in
millions, except share data)
|
|||||||||||||||||||||||||
|
Accumulated
|
|||||||||||||||||||||||||
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Additional
|
Other
|
||||||||||||||||||||||||
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Preferred
|
Common
Stock
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Paid-in
|
Retained
|
Comprehensive
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Treasury
|
||||||||||||||||||||
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Stock
|
Class
A
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Class
B
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Capital
|
Earnings
|
Income
|
Stock
|
Total
|
||||||||||||||||||
|
BALANCE,
February 28, 2006
|
$
|
-
|
$
|
2.0
|
$
|
0.3
|
$
|
1,159.4
|
$
|
1,592.3
|
$
|
247.4
|
$
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(26.2
|
)
|
$
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2,975.2
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||||||||
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Comprehensive
income:
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|||||||||||||||||||||||||
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Net
income for Fiscal 2007
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-
|
-
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-
|
-
|
331.9
|
-
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-
|
331.9
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|||||||||||||||||
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Other
comprehensive income (loss), net of tax:
|
|||||||||||||||||||||||||
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Foreign
currency translation adjustments, net of tax
effect
of $10.1
|
-
|
-
|
-
|
-
|
-
|
132.1
|
-
|
132.1
|
|||||||||||||||||
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Unrealized
loss on cash flow hedges:
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|||||||||||||||||||||||||
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Net
derivative losses, net of tax effect of $4.3
|
-
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-
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-
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-
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-
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(7.3
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)
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-
|
(7.3
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)
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|||||||||||||||
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Reclassification
adjustments, net of tax effect
of
$5.1
|
-
|
-
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-
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-
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-
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(10.4
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)
|
-
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(10.4
|
)
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|||||||||||||||
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Net
loss recognized in other comprehensive income
|
(17.7
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)
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|||||||||||||||||||||||
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Minimum
pension liability adjustment, net of tax
effect
of $1.1
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-
|
-
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-
|
-
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-
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(3.4
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)
|
-
|
(3.4
|
)
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|||||||||||||||
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Other
comprehensive income, net of tax
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111.0
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||||||||||||||||||||||||
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Comprehensive
income
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442.9
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||||||||||||||||||||||||
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Adjustments
to initially apply SFAS No. 158, net of
tax
effect of $4.1
|
-
|
-
|
-
|
-
|
-
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(9.3
|
)
|
-
|
(9.3
|
)
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|||||||||||||||
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Repurchase
of 3,894,978 Class A Common shares
|
-
|
-
|
-
|
-
|
-
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-
|
(100.0
|
)
|
(100.0
|
)
|
|||||||||||||||
|
Conversion
of 32,000 Class B Convertible Common
shares
to Class A Common shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||
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Exercise
of 5,423,708 Class A stock options
|
-
|
0.1
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-
|
63.6
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-
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-
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-
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63.7
|
|||||||||||||||||
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Employee
stock purchases of 318,137 treasury shares
|
-
|
-
|
-
|
4.1
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-
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-
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1.8
|
5.9
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|||||||||||||||||
|
Stock-based
employee compensation
|
-
|
-
|
-
|
17.9
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-
|
-
|
-
|
17.9
|
|||||||||||||||||
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Dividend
on Preferred Shares
|
-
|
-
|
-
|
-
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(4.9
|
)
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-
|
-
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(4.9
|
)
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|||||||||||||||
|
Conversion
of 170,500 Mandatory Convertible Preferred
shares
|
-
|
0.1
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-
|
(0.1
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)
|
-
|
-
|
-
|
-
|
||||||||||||||||
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Issuance
of 8,614 restricted Class A Common shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
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|||||||||||||||||
|
Amortization
of unearned restricted stock compensation
|
-
|
-
|
-
|
0.1
|
-
|
-
|
-
|
0.1
|
|||||||||||||||||
|
Tax
benefit on Class A stock options exercised
|
-
|
-
|
-
|
26.0
|
-
|
-
|
-
|
26.0
|
|||||||||||||||||
|
Tax
benefit on disposition of employee stock purchases
|
-
|
-
|
-
|
0.1
|
-
|
-
|
-
|
0.1
|
|||||||||||||||||
|
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.1
|
)
|
(0.1
|
)
|
|||||||||||||||
|
BALANCE,
February 28, 2007
|
$
|
-
|
$
|
2.2
|
$
|
0.3
|
$
|
1,271.1
|
$
|
1,919.3
|
$
|
349.1
|
$
|
(124.5
|
)
|
$
|
3,417.5
|
||||||||
*********************
2
Note
1. Summary of Significant Accounting Policies
Stock-based
Employee Compensation Plans, page 72
|
2.
|
We
note that, upon adoption of SFAS 123R, you revised your approach
for
recognition of compensation expense for all new stock-based awards
that
accelerate vesting upon retirement. Please tell us and disclose in
future
filings the impact of this change in policy so that investors can
compare
results of operations pre and post adoption of SFAS
123R.
|
Company
Response:
The
Company did not disclose the impact of the change in policy for recognition
of
compensation expense for awards that accelerate vesting upon retirement as
amounts associated with this policy change were not material to the Company’s
results of operations for all periods presented. Prior to the Company’s adoption
of SFAS No. 123(R) on March 1, 2006, the vast majority of the Company’s
stock-based awards contained a performance-based acceleration feature. As such,
due to the Company’s performance, many of the Company’s stock-based awards were
vested on an accelerated basis, either in the same fiscal year of the grant
or
in the fiscal year following the fiscal year of grant. In addition, as described
in the Filing, in February 2006, the Company accelerated the vesting of all
remaining unvested stock options that contained a performance-based acceleration
feature (consisting primarily of awards granted in the fiscal year ended
February 28, 2006). Accordingly, the change in the recognition of expense
associated with retirement-eligible employees at the date of grant and employees
who became retirement-eligible during the requisite service period did not
have
a material impact on the Company’s disclosures as the expense was already being
“recorded” either in the Consolidated Statements of Income or in the pro forma
footnote on an accelerated basis. To clarify the disclosure, the Company will
revise its disclosure in future filings to read as follows:
Stock-based
employee compensation plans -
With
the
Company’s adoption of SFAS No. 123(R) on March 1, 2006, the Company revised its
approach for recognition of compensation expense for all new stock-based awards
that accelerate vesting upon retirement. Under this revised approach,
compensation expense will be recognized immediately for awards granted to
retirement-eligible employees or over the period from the date of grant to
the
date of retirement-eligibility if that is expected to occur during the requisite
service period. The impact of the Company’s revised expense recognition approach
for awards granted to retirement-eligible employees was not material to the
Company’s results of operations for the years ended February 28, 2007, February
28, 2006, and February 28, 2005.
*********************
3
Note
22. Business Segment Information, page 116
|
3.
|
We
have reviewed your response to prior comment 10 in our letter dated
February 28, 2007. Considering that the acquired work in process
and
finished good inventories were required to be stepped-up from their
“adverse” historical book values under SFAS 141 and released through cost
of product sold, it is not clear why you disclose and quantify the
“flow
through” of adverse grape costs throughout your filing. It seems that your
inventory balance as of the acquisition date would have remained
unchanged
even if the acquiree had originally purchased the grapes at market
value.
Accordingly, we believe you should remove quantifications of the
flow
through of adverse grape costs and inventory step-up from future
filings
including your footnotes to the selected quarterly financial information
note to your financial statements. In discussing the impact of acquired
inventory on your gross profit, we believe a more appropriate presentation
would be a discussion in MD&A of the negative impact those sales had
on your overall gross profit
percentage.
|
Company
Response:
As
supplemental information for the staff, the Company responds to this comment
as
follows. The inventory balance as of the acquisition date would remain unchanged
even if the acquiree had originally purchased the grapes at market value
because
the acquired inventory is stated at fair value in accordance with SFAS No.
141.
If the acquiree had originally purchased the grapes at market value rather
than
at the higher contracted pricing, then the difference between fair value
under
SFAS No. 141 and the carryover basis (the historical acquiree book value)
would
have been inventory step-up and there would have been no adverse grape
cost.
Management
of the Company does not include the impact of inventory step-up (and adverse
grape cost) in its evaluation of segment results of operations. The reason
management does not include inventory step-up (and adverse grape cost) in
its
evaluation of segment results of operations is that management reviews the
results of operations using a “normalized” operating income that the segment is
expected to generate once the acquired stepped-up inventory is depleted.
In
addition, management does not compensate segment management for improving
results of operations only as a result of no longer having inventory step-up
(or
adverse grape cost) in its results of operations. As such, the performance
measures for incentive compensation purposes for segment management do not
include the impact of inventory step-up (and adverse grape cost).
Therefore,
in accordance with how the Company’s operations are managed, how operating
performance is evaluated and how segment management is compensated, the
Company’s segment reporting and segment discussion in Management’s Discussion
and Analysis of Financial Condition and Results of Operations do not include
the
impact of inventory step-up, adverse grape cost and unusual items. The Company
believes this reporting complies with the requirements of SFAS No. 131 for
segment reporting. To clarify why management excludes the impact of these
items
from its definition of operating income for segment purposes, the Company
will
expand the narrative disclosure in its Business Segment Information footnote
to
include the additional information noted above in its future filings (see
revised narrative disclosure in Note 22 below).
In
addition, the Company will remove quantifications of the flow through of
adverse
grape costs and inventory step-up from its Selected Quarterly Financial
Information footnote in its next Form 10-K filing (see revised presentation
in
Note 25 below).
4
22.
BUSINESS
SEGMENT INFORMATION:
As
a
result of the Company’s investment in Crown Imports, the Company has changed its
internal management financial reporting to consist of three business divisions,
Constellation Wines, Constellation Spirits and Crown Imports. Prior to the
investment in the joint venture, the Company’s internal management financial
reporting included the Constellation Beers business division. Consequently,
the
Company reports its operating results in five segments: Constellation Wines
(branded wine, and U.K. wholesale and other), Constellation Beers (imported
beer), Constellation Spirits (distilled spirits), Corporate Operations and
Other
and Crown Imports (imported beer). Segment results for Constellation Beers
are
for the period prior to January 2, 2007, and segment results for Crown Imports
are for the period on and after January 2, 2007. Amounts included in the
Corporate Operations and Other segment consist of general corporate
administration and finance expenses. These amounts include costs of executive
management, corporate development, corporate finance, human resources, internal
audit, investor relations, legal, public relations, global
information technology and global strategic sourcing.
Any
costs incurred at the corporate office that are applicable to the segments
are
allocated to the appropriate segment. The amounts included in the Corporate
Operations and Other segment are general costs that are applicable to the
consolidated group and are therefore not allocated to the other reportable
segments. All costs reported within the Corporate Operations and Other segment
are not included in the chief operating decision maker’s evaluation of the
operating income performance of the other operating segments.
The
new
business segments reflect how the Company’s operations are managed, how
operating performance within the Company is evaluated by senior management
and
the structure of its internal financial reporting. The financial information
for
the years ended February 28, 2006, and February 28, 2005, has been restated
to
conform to the new segment presentation.
In
addition, the Company excludes acquisition-related integration costs,
restructuring and related charges and unusual items that affect comparability
from its definition of operating income for segment purposes as these items
are
not reflective of normal continuing operations of the segments. The Company
excludes these items as segment operating performance and segment management
compensation is evaluated based upon a normalized segment operating income.
As
such, the performance measures for incentive compensation purposes for segment
management do not include the impact of these items.
5
For
the
year ended February 28, 2007, acquisition-related integration costs,
restructuring and related charges and unusual costs consist of restructuring
and
related charges of $32.5 million associated primarily with the Fiscal 2007
Wine
Plan and Fiscal 2006 Plan; the flow through of inventory step-up of $30.2
million associated primarily with the Company’s acquisition of Vincor;
acquisition-related integration costs of $23.6 million associated primarily
with
the Vincor Plan; other charges of $16.3 million associated with the Fiscal
2007
Wine Plan and Fiscal 2006 Plan included within selling, general and
administrative expenses; loss on the sale of the branded bottled water business
of $13.4 million; financing costs of $11.9 million related primarily to the
Company’s new senior credit facility entered into in connection with the Vincor
acquisition; foreign currency losses of $5.4 million on foreign denominated
intercompany loan balances associated with the Vincor acquisition; the flow
through of adverse grape cost (as described below) of $3.1 million associated
with the acquisition of Robert Mondavi; and accelerated depreciation costs
and
the write-down of certain inventory of $6.6 million and $0.6 million,
respectively, associated primarily with the Fiscal 2006 Plan and Fiscal 2007
Wine Plan. Adverse grape cost represents the amount of historical inventory
cost
on Robert Mondavi’s balance sheet that exceeds the Company’s estimated ongoing
grape cost and is primarily due to the purchase of grapes by Robert Mondavi
prior to the acquisition date at above-market prices as required under the
terms
of their existing grape purchase contracts. For the year ended February 28,
2006, acquisition-related integration costs, restructuring and related charges
and unusual costs consist of restructuring and related charges associated
primarily with the Fiscal 2006 Plan and the Robert Mondavi Plan of $29.3
million; the flow through of adverse grape cost, acquisition-related integration
costs and the flow through of inventory step-up associated primarily with
the
Company’s acquisition of Robert Mondavi of $23.0 million, $16.8 million, and
$7.9 million, respectively; accelerated depreciation costs and other charges
associated with the Fiscal 2006 Plan of $13.4 million and $0.1 million,
respectively; and costs associated with professional service fees incurred
for
due diligence in connection with the Company’s evaluation of a potential offer
for Allied Domecq of $3.4 million. For the year ended February 28, 2005,
acquisition-related integration costs, restructuring and related charges
and
unusual costs consist of financing costs associated with the redemption of
the
Company’s Senior Subordinated Notes (as defined in Note 9) and
the
repayment of the Company’s prior senior credit facility in connection with the
Robert Mondavi acquisition of $31.7 million;
the
flow through of adverse grape cost and acquisition-related integration costs
associated with the Robert Mondavi acquisition of $9.8 million and $9.4 million,
respectively; restructuring and related charges of $7.6 million associated
with
the Fiscal 2004 Plan and the Robert Mondavi Plan; and the flow through of
inventory step-up associated primarily with the acquisition of all of the
outstanding capital stock of BRL Hardy Limited, now known as Hardy Wine Company
Limited (the “Hardy Acquisition”) of $6.4 million; partially offset by a net
gain on the sale of non-strategic assets of $3.1 million and a gain related
to
the receipt of a payment associated with the termination of a previously
announced potential fine wine joint venture of $3.0 million.
The
accounting policies of the segments are the same as those described for the
Company in the Summary of Significant Accounting Policies in Note 1 and include
the recently adopted accounting pronouncements described in Note 2. Transactions
between segments consist mainly of sales of products and are accounted for
at
cost plus an applicable margin.
6
25.
SELECTED
QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
A
summary
of selected quarterly financial information is as follows:
|
QUARTER
ENDED
|
||||||||||||||||
|
Fiscal
2007
|
May
31,
2006
|
|
August
31,
2006
|
|
November
30,
2006
|
|
February
28,
2007
|
|
Full
Year
|
|||||||
|
(in
millions, except per share data)
|
||||||||||||||||
|
Net
sales
|
$
|
1,155.9
|
$
|
1,417.5
|
$
|
1,500.8
|
$
|
1,142.2
|
$
|
5,216.4
|
||||||
|
Gross
profit
|
$
|
318.6
|
$
|
414.8
|
$
|
445.2
|
$
|
345.3
|
$
|
1,523.9
|
||||||
|
Net
income(1)
|
$
|
85.5
|
$
|
68.4
|
$
|
107.8
|
$
|
70.2
|
$
|
331.9
|
||||||
|
Earnings
per common share(2):
|
||||||||||||||||
|
Basic
- Class A Common Stock
|
$
|
0.38
|
$
|
0.30
|
$
|
0.47
|
$
|
0.30
|
$
|
1.44
|
||||||
|
Basic
- Class B Common Stock
|
$
|
0.34
|
$
|
0.27
|
$
|
0.42
|
$
|
0.27
|
$
|
1.31
|
||||||
|
Diluted
- Class A Common Stock
|
$
|
0.36
|
$
|
0.28
|
$
|
0.45
|
$
|
0.29
|
$
|
1.38
|
||||||
|
Diluted
- Class B Common Stock
|
$
|
0.33
|
$
|
0.26
|
$
|
0.41
|
$
|
0.27
|
$
|
1.27
|
||||||
|
QUARTER
ENDED
|
||||||||||||||||
|
Fiscal
2006
|
May
31,
2005
|
August
31,
2005
|
November
30,
2005
|
February
28,
2006
|
Full
Year
|
|||||||||||
|
(in
millions, except per share data)
|
||||||||||||||||
|
Net
sales
|
$
|
1,096.5
|
$
|
1,192.0
|
$
|
1,267.1
|
$
|
1,047.9
|
$
|
4,603.5
|
||||||
|
Gross
profit
|
$
|
306.0
|
$
|
348.0
|
$
|
384.2
|
$
|
286.4
|
$
|
1,324.6
|
||||||
|
Net
income(3)
|
$
|
75.7
|
$
|
82.4
|
$
|
109.0
|
$
|
58.2
|
$
|
325.3
|
||||||
|
Earnings
per common share(2):
|
||||||||||||||||
|
Basic
- Class A Common Stock
|
$
|
0.34
|
$
|
0.37
|
$
|
0.49
|
$
|
0.25
|
$
|
1.44
|
||||||
|
Basic
- Class B Common Stock
|
$
|
0.31
|
$
|
0.33
|
$
|
0.44
|
$
|
0.23
|
$
|
1.31
|
||||||
|
Diluted
- Class A Common Stock
|
$
|
0.32
|
$
|
0.34
|
$
|
0.46
|
$
|
0.24
|
$
|
1.36
|
||||||
|
Diluted
- Class B Common Stock
|
$
|
0.29
|
$
|
0.32
|
$
|
0.42
|
$
|
0.22
|
$
|
1.25
|
||||||
|
(1)
|
In
Fiscal 2007, the Company recorded certain unusual items consisting
of
restructuring and related charges associated primarily with the
Fiscal
2007 Wine Plan and Fiscal 2006 Plan; acquisition-related integration
costs
associated primarily with the Vincor Plan; other charges associated
with
the Fiscal 2007 Wine Plan and Fiscal 2006 Plan included within
selling,
general and administrative expenses; loss on the sale of the branded
bottled water business; financing costs related primarily to the
Company’s
new senior credit facility entered into in connection with the
Vincor
acquisition; foreign currency losses on foreign denominated intercompany
loan balances associated with the Vincor acquisition; accelerated
depreciation costs associated with the Fiscal 2006 Plan and Fiscal
2007 Wine Plan; and gain on change in fair value of derivative
instruments
associated with the Vincor acquisition. The following table identifies
these items, net of income taxes, by quarter and in the aggregate
for
Fiscal 2007:
|
|
QUARTER
ENDED
|
||||||||||||||||
|
Fiscal
2007
|
May
31,
2006
|
August
31,
2006
|
November
30,
2006
|
February
28,
2007
|
Full
Year
|
|||||||||||
|
(in
millions, net of tax)
|
||||||||||||||||
|
Restructuring
and related charges
|
$
|
1.5
|
$
|
15.6
|
$
|
1.7
|
$
|
4.3
|
$
|
23.1
|
||||||
|
Acquisition-related
integration costs
|
$
|
0.4
|
$
|
4.7
|
$
|
6.1
|
$
|
3.9
|
$
|
15.1
|
||||||
|
Other
charges
|
$
|
1.0
|
$
|
1.0
|
$
|
9.5
|
$
|
1.0
|
$
|
12.5
|
||||||
|
Loss
on sale of branded bottled water
business
|
$
|
17.3
|
$
|
0.1
|
$
|
(0.6
|
)
|
$
|
-
|
$
|
16.8
|
|||||
|
Write-off
of financing fees
|
$
|
-
|
$
|
7.4
|
$
|
-
|
$
|
0.1
|
$
|
7.5
|
||||||
|
Accelerated
depreciation
|
$
|
0.7
|
$
|
0.9
|
$
|
1.4
|
$
|
1.6
|
$
|
4.6
|
||||||
|
Fx-related
(gains) losses on Vincor
transaction
|
$
|
(33.6
|
)
|
$
|
1.7
|
$
|
-
|
$
|
-
|
$
|
(31.9
|
)
|
||||
7
|
(2)
|
The
sum of the quarterly earnings per common share in Fiscal 2007 and
Fiscal
2006 may not equal the total computed for the respective years as
the
earnings per common share are computed independently for each of
the
quarters presented and for the full
year.
|
|
(3)
|
In
Fiscal 2006, the Company recorded certain unusual items consisting
of
restructuring and related charges associated primarily with the Fiscal
2006 Plan and the Robert Mondavi Plan; acquisition-related integration
costs associated primarily with the Robert Mondavi acquisition;
accelerated depreciation costs in connection with the Fiscal 2006
Plan;
the write-off of due diligence costs associated with the Company’s
evaluation of a potential offer for Allied Domecq; and an income
tax
adjustment in connection with the reversal of an income tax accrual
related to the completion of various income tax examinations. The
following table identifies these items, net of income taxes, by quarter
and in the aggregate for Fiscal
2006:
|
|
QUARTER
ENDED
|
||||||||||||||||
|
Fiscal
2006
|
May
31,
2005
|
August
31,
2005
|
November
30,
2005
|
February
28,
2006
|
Full
Year
|
|||||||||||
|
(in
millions, net of tax)
|
||||||||||||||||
|
Restructuring
and related charges
|
$
|
1.1
|
$
|
1.5
|
$
|
2.6
|
$
|
15.5
|
$
|
20.7
|
||||||
|
Acquisition-related
integration costs
|
$
|
3.9
|
$ |
5.1
|
$ |
1.0
|
$ |
0.7
|
$ |
10.7
|
||||||
|
Accelerated
depreciation
|
$ |
-
|
$ |
-
|
$ |
4.4
|
$ |
4.6
|
$ |
9.0
|
||||||
|
Allied
Domecq due diligence costs
|
$ |
-
|
$ |
2.4
|
$ |
(0.2
|
)
|
$ |
-
|
$ |
2.2
|
|||||
|
Income
tax adjustment
|
$ |
(16.2
|
)
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
(16.2
|
)
|
||||
*********************
If
you
have any questions or comments with respect to any of the foregoing matters,
please do not hesitate to contact me at (585) 218-3665 or Greg Belemjian
at
(585) 218-3658.
Sincerely,
CONSTELLATION
BRANDS, INC.
/s/
Thomas F. Howe
Thomas
F. Howe
Senior Vice
President, Controller
Cc: Members
of the Audit Committee of the Board of Directors of Constellation Brands,
Inc.
KPMG
LLP
8