Good morning. My name is Ray and I will be your conference operator today. At this time, I would like to welcome everyone to the Constellation Brands first quarter 2009 earnings conference call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Patty Yahn-Urlaub, Vice President of Investor Relations. Madam, you may begin your conference.

Thank you, Ray. Good morning, everyone and welcome to Constellation’s first quarter fiscal year 2009 conference call. I am here this morning with Rob Sands, our President and Chief Executive Officer; and Bob Ryder, our Chief Financial Officer. By now, you should have had an opportunity to read our news release, which has also been furnished to the SEC. This conference call is intended to complement the release. During the call, we will discuss financial information on a GAAP comparable organic and constant currency basis. Reconciliations between the most directly comparable GAAP measure and these and other non-GAAP financial measures are included in the news release or otherwise available on the company’s website at www.cbrands.com, under the investor section. These reconciliations include explanations as to why management uses the non-GAAP financial measures and why management believes they are useful to investors. Discussions will generally focus on comparable financial results, excluding acquisition-related costs, restructuring and related charges, and unusual items. We will also discuss organic net sales information, which is defined in the news release, and constant currency net sales information, which excludes the impact of year-over-year currency exchange rate fluctuations. Please be aware that we may make forward-looking statements during this call. While those statements represent our best estimates and expectations, actual results could differ materially from our estimates and expectations. For a detailed list of risk factors that may impact the company’s estimates, please refer to the news release and Constellation’s SEC filings. Thank you, and now I would like to turn the call over to Rob.

Thanks, Patty and good morning, everyone. First I would like to thank all of you who attended our recent New York City investors meeting. I hope that one of your takeaways from that meeting is that Constellation management team is intensely focused on executing a strategy that delivers value by enhancing operating margins and profitability, improving ROIC, and generating free cash flow, which enables debt reduction. I believe our first quarter results and fiscal 2009 financial goals demonstrate that commitment. Another example of this strategic execution is the recently announced divestiture of certain U.S. wine brands and assets that were acquired with the Clos du Bois and Wild Horse transaction, as well as some of our northwest brands from Washington State and Idaho. Collectively, these brands represented approximately 1 million cases of wine sold in calendar 2007. Despite the fact that these were premium brands, the rationale for divesting was straightforward. We simplified our portfolio, eliminated product redundancies, and better aligned the cost to produce our products with their corresponding price points at retail. We received $209 million in cash for these brands, which we utilized to reduce debt, and we have an opportunity to receive up to $25 million in an earn-out if certain business objectives are met by the buyer within the next five years. So now I’d like to discuss our business and financial performance for our first quarter. We’re off to a great start in fiscal 2009. Our results for the first quarter were solid and in line with our expectations. We increased sales and enhanced profitability in our North American and international operations above and beyond the benefit we received from the cycling of our U.S. distributor wine inventory reduction initiative. From an international perspective, we’ve been taking actions to improve profitability, operating efficiencies, and…

Thanks, Rob. Good morning, everyone. Overall, I am pleased with our start to the year and our results for the quarter, with comparable basis diluted EPS coming in at $0.34 versus $0.21 last year. This was in line with our expectations and puts us on a path to achieving our full-year goal of $1.68 to $1.76. We used $55 million of free cash flow in Q1 versus a use of $104 million for the prior year, and we are still on track to reach our $310 million to $340 million free cash flow goal for fiscal 2009. As a reminder, historically we are a net user of cash in the first quarter. We believe our Q1 results demonstrate that the many significant steps we have taken over the past 12 to 15 months have increased our profit generation profile to drive improved financial results in fiscal 2009 and beyond. Now let’s look at our Q1 fiscal 2009 P&L performance, where my comments will generally focus on comparable basis financial results. Let’s look at net sales. As you can see from our news release on page 13, our consolidated reported net sales increased 3%, primarily reflecting branded wine growth, including the net benefit of adding brands like Clos du Bois and Wild Horse, and divesting Almaden and Inglenook. We also saw favorable foreign currency translation, partially offset by the impact of moving the U.K. wholesale business to the Matthew Clarke joint venture. The growth rate was 16% after excluding the impact of acquisitions, divestitures, and joint ventures, and 13% on an organic constant currency basis. This strong growth rate includes the benefits of overlapping our initiative to reduce distributor wine inventories in the U.S., which negatively impacted net sales in the first and second quarters of fiscal ’08. Commentary for the…

(Operator Instructions) Our first question comes from Tim Ramey of D. A. Davidson. Timothy Ramey - D. A. Davidson & Co. : Good morning. Congratulations on a great quarter. I’m sorry, I think you said this and I missed it, but the comparable line sales excluding the impact to the inventory draw-down was what in the quarter?

It was around mid-single-digits in North America. Timothy Ramey - D. A. Davidson & Co. : Okay, and there’s still some of the impact of the draw-down that will fall into the 2Q. Can you help us for our modeling purposes?

It will be about $30 million in Q2, because about three quarters of last year’s $110 million occurred in the first quarter, so what’s left is around $30 million of sales and about $0.04 of EPS for Q2. Timothy Ramey - D. A. Davidson & Co. : Great. Appreciate it. And you know, there’s -- I was on CNBC this morning getting asked whether you guys would buy pieces of Foster or [Derringer]. I think you made a strong case here and on the road with me that your focus is on hunkering down. Can I get you to repeat that one more time, hunker down and pay down debt?

Well, Tim, clearly our focus is on hunkering down and paying down debt, so it is as we have said, which is we are focused on generating internal efficiencies, improving free cash flow, improving ROIC and paying down debt. So these are key initiatives for our management team.

And I think you saw that in the first quarter. That’s what we did. Timothy Ramey - D. A. Davidson & Co. : That’s terrific. Thank you.

Thank you. Our next question comes from Lauren Torres with HSBC.

Good morning. I was hoping you could be a bit more specific with respect to the price increases that you took in the quarter -- any sense of the magnitude or give us a sense of how much of an increase you took, where you took it, and also just going forward, is there more to come or you pretty much took as much as you can, or as I said, take more going into the second quarter?

It varied a little bit by geography but I’d say in the U.S. in the wine business, it was probably around 3% kind of pricing, and expected at -- it had a bit of a volume hit and it will take a while to build out of that. I don’t think we’re looking at significant pricing in the balance of the year in North America for wine. Spirits also took pricing in the first quarter and I think they are looking, because they have a little bit more input cost inflation, they are looking to take some additional pricing [down into the year]. And as we talked internationally, the U.K. originally had their pricing increase. It was around again 3% to 4% but then when the duty came in, they actually increased it to match the duty, so I think they are pretty much done with their pricing for the year. And Australia also took some pretty significant pricing in the first quarter, like 5% to 7%, and I think they are looking at maybe taking some additional pricing balance of the year because as Rob had said, they had to pay a bit more for grapes this year because of farmers had to buy a lot of water, which is reflected in our cost of goods sold. And again, we’re trying to balance improving our margins and using pricing to do that [with] the volume impact of that, because when we price we certainly see some volume reductions, but on a worldwide basis certainly in the wine business, the supply of grapes is pretty much matched up with the demand for them, so we do think there’s -- this is the right time to do what we are doing.

And you said there was a volume hit with respect to U.S. wine. How much of a hit was that?

Well, I think we -- for volumes, we were a little bit light on the prices on the products that we price, and I think the two brands specifically, if you look at IRI, where share probably is keeping pace is a brand called Vendange and Clos du Bois. And Vendange is sort of a lower end brand, so it tends to be more price sensitive, and we’re managing it more for profitability versus share of market. And in the Clos du Bois, and I think we mentioned on previous calls, we took -- actually, the previous owner took about 6% to 7% pricing at the end of the calendar year. That’s a pretty significant price increase for a wine brand, so the volume on that have actually taken a hit commensurate with that. But as we get further past that price increase, and we’re like in month six, we see the volumes beginning to recover there and our market share beginning to recover as well.

And are you seeing your competitors take some more pricing?

We are seeing pricing across the marketplace and pretty much in all of the geographies. Everybody is under the same pressures we are and I think everybody else sees the same supply/demand dynamics that we see.

Thank you.

(Operator Instructions) Our next question comes from Brian Hunt of Wachovia.

Thank you. In line with your focus to hunker down and generate free cash, looking at your target of 310 to 340, it appears that there’s a significant amount of opportunity in working capital. Could you talk about your working capital targets for the year and how much the 310 to 340 comes from working capital benefit?

Yeah, I’d say in general we are much more focused on generating cash flow as a company. I’ll say a couple of things around that. Number one, I think the results show that. If you look at fiscal ’08 and fiscal ’09 and sort of average it, we’d be generating about $350 million a year, which I think is much higher than we’ve generated historically. At the New York investors conference, I think I said that as a company we’re trying to increase the EBIT flow-through to free cash flow, which over the last three years has probably been in the mid 30% range. We are trying to get that to sort of the mid-40% range, meaning the amount of EBIT that as a percent of free cash flow. We’ve changed the incentive within the company, so that people -- part of their bonus metric is now based on free cash flow and we are seeing some -- a much increased opportunity, a much increased focus on generating free cash flow because you know, if you look at our balance sheet, we have a sizable investment in net working capital. The big investment is in inventory, of course, and I think we’ve -- you know, you’ve seen some activities to improve that, like reducing less profitable SKUs because when you look at it from a return on capital perspective, it’s difficult for those SKUs, because they are lower margin and they sort of tie up a lot of working capital, generate -- it’s difficult for them to return the cost of capital. So we’re not giving specific working capital goals but I think you will see it as we proceed and I think you are seeing it in the bottom line as we speak.

Okay. Thank you very much.

Thank you. Our next question comes from Mark Swartzberg of Stifel Nicolaus.

A question about Canada, which is doing very well, I think you said up double-digits in the quarter; can you give us a little more detail on what’s going on there? And of course, with an [inaudible] towards sustainability, give us an idea of growth you see in the market going forward.

Yeah, Mark, you know, Canada is in general a great market for us. People are consuming more wine as the -- the consumers are very loyal to Canadian wines. There’s big trading up going on into the EQA segment, and in general it just remains a strong market. I would say that we don’t see that abating for any particular reason. I think that the trends are pretty firmly intact and I think we should continue to see, continue to enjoy favorable trends. Our portfolio is really well-positioned in terms of the products that we have to take advantage of those trends, so we are pretty optimistic about the market.

Just the other thing on this, we are the market share leader up there. It’s a country which actually some countries in Europe are looking at, it has a minimum net pricing so it tends to help the brand owner and there’s a big opportunity there, big market shift towards imported new [world] lines, so from Australia, New Zealand, and the U.S. And we are very well situated to take advantage of that opportunity. So we see, albeit it’s not a huge market, especially compared to the U.S., but we see some pretty good opportunities for Canada going forward.

And when you say growth not abating, what’s really driving my question is it’s not normally low double-digit kind of growth there, so do you see low double-digit sustained? And is that distribution, is that new products -- I mean, what’s -- obviously it appears you are taking share. I’m just trying to understand what’s up-ticking there.

I think in general, Canada, you know, the market probably grows 5% to 7%, so I think you are right; this quarter, I don’t think we’d expect double-digit growth going forward. There’s some timing impacts there but it’s a strong top line in Canada and we expect to take advantage of that.

And can you help us just connect the dots between the market and the growth you saw in the quarter? What besides what you have in the release in terms of the named brands really changed there?

We can get back to Patty or Bob on some specifics on that, Mark. You know, it’s a combination of factors, new SKUs and product introductions, things to that effect. I think as much as Bob told you that we probably would expect growth in Canada to be in excess of U.S. growth, probably mid to high single digits but we’re not going to project sustained double-digit growth, so I’d be -- that’s what you should probably take away from now.

Great. Thanks, guys.

(Operator Instructions) Our next question comes from Bryan Spillane of Banc of America.

Good morning. Just a couple of questions, or a question, I guess, regarding some of your cost saving initiatives and efforts to improve return on capital. First I guess, you had mentioned at the analyst day a program to reduce SKUs, eliminate some lower margin or lower turn brands, so if you could talk a little bit about how that -- if that had any impact on your sales in the quarter. And then second, if you guys could just talk a bit about where you stand now in terms of your project list -- you know, what’s currently being worked on and then what you have sort of in the pipeline with certain initiatives to continue to boost your turns and grow margin.

Brian, first of all, as I mentioned in my talk, we discontinued in our value segment about 50 brands, about 1,600 SKUs. That’s only one of the factors that has impacted our sales growth. Even though our sales growth in North America, by the way, in general is well in line with targets, notwithstanding the fact that it’s been impacted by the couple of things Bob mentioned -- Clos du Bois pricing, the way that we are managing the Vendange brand, and the third item is the fact that we now don’t have those 50 brands flowing through as well. But nevertheless, on a purely organic basis, taking into account the distributor inventory reduction, even including these factors we’re growing the business in North America at about a 5% rate, which is exactly consistent with our mid-single-digit growth. We’ve got lots of initiatives to reduce cost of goods sold. I think a good example of that is our recently announced disposition of our Valley Fields facility, primarily a contract production facility, although maybe about 20% of it in various ways was utilized for our products. We’ve got a brand new modern facility in Lethbridge, Canada in Alberta that we can consolidate production into, so these are the kind of moves that we continue to make to boost margins, to improve ROIC. The disposition of the brands that we recently announced that we are selling, there again -- you know, we’ve developed what I’ll call a disposition discipline, okay? If we’ve got brands that we don’t see are strategic, that we believe can be sold in excess of the net present value of our forecasted cash flows of those brands at our [inaudible], you know, those are the kinds of ROIC improvement initiatives that we are undertaking. Bob, do you have anything to add?

No, I think the other thing we talked about, Brian, is -- and it relates back to the, you know, some of the projects in which we are working, is we are looking pretty intently at our Australian business and looking at sort of the return on capital and profitability by brand and actually by SKU, and that will most likely result in some reductions to the SKU count on brands that can’t return their cost of capital. And that should improve our margins down there and should improve our working capital, as we have just fewer things hanging around the warehouse. And I think that, coupled with the pricing we have already taken and maybe some additional pricing we’ll be looking at balance of year, should improve our profitability in both Australia and the U.K. So I think, you know, there’s some of the things that we are looking at.

Great. Thanks, guys.

Thank you. There are no further questions at this time. I would like to turn the floor back to Rob Sands for any closing comments.

Okay, well thank you, everybody, for joining our call today. We’re very pleased with our results for the quarter. As I mentioned, I think that we are off to a great start for fiscal 2009 and I believe we are well-positioned to achieve our free cash flow and EPS goals for the year. Our recent actions demonstrate that we continue to execute our strategies. A few examples include the divestiture of the California northwest assets that I just talked about. Of course, we used those proceeds to pay down debt. We have realized pricing and thus increased profitability in our international markets where we have a strong presence. And overall, we planned continued margin expansion and ROIC enhancement as we drive internal efficiencies and further premiumize our portfolio. Thanks again, everybody, for your participation and we hope you enjoy some of our excellent products during the Fourth of July holiday.

Thank you. This concludes today’s Constellation Brands first quarter 2009 earnings conference call. You may now disconnect and have a great day.