CONSTELLATION BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Years Ended  February 29, February 28, February 28, 2004 2003 2002 SALES $ 4,469,27 $ 3,583,082 $ 3,420,213 Less – Excise taxes  (916,841) (851,470) (813,455) Net sales  3,552,429  2,731,612  2,606,758  COST OF PRODUCT SOLD  (2,576,641) (1,970,897) (1,911,598) Gross profit  975,788  760,715  695,160  SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (457,277) (350,993) (355,269) RESTRUCTURING AND RELATED CHARGES  (31,154) (4,764) –– Operating income  487,357  404,958  339,891  GAIN ON CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS  1,181  23,129  –– EQUITY IN EARNINGS OF JOINT VENTURE  542  12,236  1,667  INTEREST EXPENSE, net  (144,683) (105,387) (114,189) Income before income taxes 344,397  334,936  227,369  PROVISION FOR INCOME TAXES  (123,983) (131,630) (90,948) NET INCOME 220,414  203,306  136,421  Dividends on preferred stock  (5,746) –– –– INCOME AVAILABLE TO COMMON  STOCKHOLDERS $ 214,668 $ 203,306 $ 136,421 SHARE DATA: Earnings per common share:  Basic $ 2.13 $ 2.26 $ 1.60 Diluted $ 2.06 $ 2.19 $ 1.55 Weighted average common shares outstanding:  Basic 100,702 89,856 85,505 Diluted 106,948 92,746 87,825 SUPPLEMENTAL DATA RESTATED FOR  EFFECT OF SFAS NO. 142:  Adjusted operating income  $ 487,357  $ 404,958  $ 367,190  Adjusted net income  $ 220,414  $ 203,306  $ 155,367  Adjusted income available to common stockholders  $ 214,668  $ 203,306  $ 155,367  Adjusted earnings per common share:  Basic $ 2.13 $ 2.26 $ 1.82 Diluted $ 2.06 $ 2.19 $ 1.77 The accompanying notes to consolidated financial statements are an integral part of these statements. 40 (in thousands, except per share data)