http://www.morningstar.com/earnings/40437459-constellation-brands-inc-class-a-stz-q1-2013.aspx

Constellation Brands Inc. Class A STZ
Q1 2013 Earnings Call Transcript

Transcript Call Date 06/29/2012

Operator: Good morning. My name is Jackie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Constellation Brands' First Quarter and Fiscal Year 2013 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

I would now like turn the conference over to Patty Yahn-Urlaub, Vice President of Investor Relations. Please go ahead.

Patty Yahn-Urlaub - VP, IR: Thank you, Jackie. Good morning everyone, and welcome to Constellation's first quarter fiscal 2013 conference call. I'm here this morning with Rob Sands, our President and Chief Executive Officer; and Bob Ryder, our Chief Financial Officer.

This call complements our news release, which has also been furnished to the SEC.

During this call, we may discuss financial information on a GAAP, comparable, organic, and constant currency basis. However, discussions will generally focus on comparable financial results. 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 Investors section in Financial History.

Please also 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.

Now, I'd like to turn the call over to Rob.

Robert Sands - President and CEO: Thanks, Patty, and good morning, and welcome to our call. This has certainly been an exciting week for us. First and foremost, by announcing earlier today that we intend to purchase the remaining 50% of Crown from ABI, we are enhancing our participation in the U.S. beer market, which is one of the most attractive sectors of the beverage alcohol industry. The structure of this transaction will solidify our place in this market for the long-term and most importantly, will remove the uncertainty that we believe has created a significant overhang related to the valuation of our stock.

Crown is the number one beer importer in the U.S. where it has the exclusive right to import, market, and sell the Modelo brands which include Corona Extra, Corona Light, Modelo Especial, Pacifico, Negra Modelo and Victoria.

This transaction represents a significant milestone in the history of the Company and the next transformational step in the evolution of our business as it will give Constellation 100% ownership of the import, sales, and marketing business for the Modelo brands currently being sold in the U.S. This will also solidify Constellation's position as the largest multi-category supplier for beer, wine, and spirits, and the third largest total beverage alcohol company in the U.S. on a volume basis.

Crown will have complete independent control as a brand owner with respect to distribution, marketing, promotion, and pricing. ABI will be responsible for ensuring the continuity of supply and quality of products, as well as providing the ability to introduce innovation, although they will have no visibility or future influence on marketing, distribution, or pricing.

Read our Earnings Call Transcript disclaimer.
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