FAIRPORT, N.Y., Dec. 2, 2008 -- Constellation Brands, Inc. (NYSE: STZ, ASX: CBR), the world’s largest wine company and a leading international producer and marketer of beverage alcohol, today reported that it has closed out certain foreign currency hedges to take advantage of the recent strength of the U.S. dollar, resulting in a net cash inflow. The net proceeds are expected to be used to reduce borrowings. As a result, the company is increasing its fiscal 2009 free cash flow guidance and lowering reported diluted EPS guidance.

“As the company continues to refine certain of its international businesses, it has been reducing its foreign exchange exposure by adjusting the amount of corporate parent loans to its operating companies around the world,” explained Bob Ryder, Constellation Brands chief financial officer. “We have accelerated these activities primarily to take advantage of the recent change in foreign currency rates.”

The company expects to realize approximately $50 million in after-tax cash proceeds from the settlement of the hedge transactions, which will increase the company’s fiscal 2009 free cash flow guidance from $310-$340 million to $360-$390 million. The company’s pre-tax income will not be impacted by these transactions, although the company will pay taxes on the hedge gains. Consequently, the company expects to recognize a $0.20 diluted EPS impact for reported fiscal 2009 results. This impact will be excluded from the company’s comparable basis fiscal 2009 diluted EPS.