sales towards higher margin popular and premium wine, and a favorable foreign currency impact. These increases were partially offset by lower gross profit on the segment’s reduced bulk wine and grape juice concentrate sales. The Constellation Beers and Spirits segment’s gross profit increased $34.8 million due to increased gross profit on imported beer sales and increased gross profit on spirits sales. The increased gross profit on imported beer sales is primarily due to increased average selling prices in the Company’s Mexican beer portfolio and the increased gross profit on the segment’s spirits business is due to a favorable mix of sales towards higher margin products and lower average spirits costs. As a result of the foregoing, gross profit as a percent of net sales increased to 27.8% for Fiscal 2003 from 26.7% for Fiscal 2002. Selling, general and administrative expenses decreased to $351.0 million for Fiscal 2003 from $355.3 million for Fiscal 2002, a decrease of $4.3 million, or (1.2%). The Company adopted SFAS No. 142 on March 1, 2002, and, accordingly, stopped amor- tizing goodwill and other indefinite lived intangible assets. Therefore, the decrease of $4.3 million consists of a decrease of $27.3 million of amortization expense from Fiscal 2002 offset by an increase of $23.0 million. The Constellation Wines segment’s selling, general and administrative expenses decreased $2.6 million due to lower amortization expense of $19.1 million partially offset by (i) higher selling costs to support the growth in the U.K. wholesale business, (ii) increased selling and advertising costs on certain popular and premium wine brands, and (iii) higher selling, general and administrative expenses to support the growth in the fine wine business. The Constellation Beers and Spirits segment’s selling, general and administrative expenses decreased $4.4 million due to lower amortization expense of $8.2 million partially offset by increased selling, general and administrative expenses to support the growth in the imported beer portfolio. The Corporate Operations and Other segment’s selling, general and administrative expenses increased $2.7 million primarily due to increased personnel costs to support the Company’s growth. Selling, general and administrative expenses as a percent of net sales decreased to 12.8% for Fiscal 2003 as compared to 13.6% for Fiscal 2002. This decrease was due to the reduced amortization expense noted above partially offset by (i) the percent increase in general and admin- istrative expenses growing at a faster rate than the percent increase in net sales across all segments, and (ii) the percent increase in the Constellation Wines segment’s U.K. wholesale and U.K. branded wine selling costs being greater than the percent increase in the U.K. wholesale and U.K. branded wine net sales. The Company recorded a property, plant and equipment impairment charge of $4.8 million in Fiscal 2003 in connection with the planned closure of two of its production facilities within its Constellation Wines segment in Fiscal 2004. During Fiscal 2004, the Company began the realignment of its business operations within this segment to further improve productivity. This realignment is not expected to have an impact on brand sales. No such charges were incurred in Fiscal 2002. The following table sets forth the operating income (loss) (in thousands of dollars) by operating segment of the Company for Fiscal 2003 and Fiscal 2002. Restructuring and related charges and unusual costs of $4.8 million for Fiscal 2003 consist of certain costs that are excluded by management in their evaluation of the results of each operating segment. These costs represent restructuring and related charges associated with the Company’s realignment of its business operations in the wine segment. As a result of the above factors, operat- ing income increased to $405.0 million for Fiscal 2003 from $339.9 million for Fiscal 2002, an increase of $65.1 million, or 19.1%. Fiscal 2002 operating income for Constellation Wines and Constellation Beers and Spirits included amortization expense of $19.1 million and $8.2 million, respectively. In February 2003, the Company entered into a foreign currency collar contract in connection with the Hardy Acquisition to lock in a range for the cost of the acquisition in U.S. dollars. As of February 28, 2003, this derivative instrument had a fair value of $23.1 million. Under SFAS No. 133, a transaction that involves a business combination is not eligible for hedge accounting treatment. As such, the derivative was recorded on the balance sheet at its fair value with the change in the fair value recognized separately on the Company’s Consolidated Statements of Income. Gain on Change in Fair Value of Derivative Instruments Operating Income Restructuring and Related Charges Selling, General and Administrative Expenses Fiscal 2003 Compared to Fiscal 2002 Operating Income (Loss) 2003 2002 % Increase Constellation Wines $ 224,556 $ 191,227 17.4% Constellation Beers and Spirits 217,963 178,805 21.9% Corporate Operations and Other (32,797) (30,141) 8.8% Total Reportable Segments 409,722 339,891 20.5% Restructuring and Related Charges and Unusual Costs (4,764) – N/A Consolidated Operating Income $ 404,958 $ 339,891 19.1% 30