22. BUSINESS SEGMENT INFORMATION: As a result of the Hardy Acquisition, the Company has changed the structure of its internal organization to consist of two busi- ness divisions, Constellation Wines and Constellation Beers and Spirits. Separate division chief executives report directly to the Company’s chief operating officer. Consequently, the Company reports its operating results in three segments: Constellation Wines (branded wine, and U.K. wholesale and other), Constellation Beers and Spirits (imported beers and distilled spirits) and Corporate Operations and Other (primarily corporate related items and other). Amounts included in the Corporate Operations and Other segment consist of general corporate administration and finance expenses. These amounts include costs of executive management, investor relations, internal audit, treasury, tax, corporate development, legal, financial reporting, professional fees and public rela- tions. Any costs incurred at the corporate office that are applicable to the segments are allocated to the appropriate segment. The amounts included in the Corporate Operations and Other segment are general costs that are applicable to the consolidated group and are therefore not allocated to the other reportable segments. All costs reported within the Corporate Operations and Other segment are not included in the chief operating decision maker’s evaluation of the operating income performance of the other oper- ating segments. The new business segments reflect how the Company’s operations are being managed, how operating performance within the Company is being evaluated by senior management and the structure of its internal financial reporting. In addition, the Company changed its definition of operating income for segment purposes to exclude restructuring and related charges and unusu- al costs that affect comparability. Accordingly, the financial information for the years ended February 28, 2003, and February 28, 2002, has been restated to conform to the new segment presentation. For the year ended February 29, 2004, restructuring and related charges and unusual costs consist of the flow through of inventory step-up and financing costs associated with the Hardy Acquisition of $22.5 million and $11.6 million, respectively, and restructuring and related charges of $48.0 million, including a write-down of commodity concentrate inventory of $16.8 million, partially offset by the relief from certain excise tax, duty and other costs incurred in prior years of $10.4 million. For the year ended February 28, 2003, restructuring and related charges and unusual costs consist of an asset impairment charge of $4.8 million recorded in connection with the Company’s realignment of its business operations within the Constellation Wines segment. For the year ended February 28, 2002, restructuring and related charges and unusual costs consist of the write-off of the remaining deferred financing costs and unamortized discount associated with certain of the Company’s senior subordinated notes which were redeemed in February 2002 of $2.6 million. The Company evaluates performance based on operating income of the respective business units. The accounting policies of the segments are the same as those described for the Company in the Summary of Significant Accounting Policies in Note 1 and include the recently adopted accounting pronouncements described in Note 2. Transactions between segments consist mainly of sales of products and are accounted for at cost plus an applicable margin. Segment information is as follows: For the Years Ended February 29, February 28, February 28, 2004 2003 2002 (in thousands) Constellation Wines: Net sales: Branded wine $ 1,549,750 $ 983,505 $ 963,514 Wholesale and other 846,306 689,794 641,589 Net sales $ 2,396,056 $ 1,673,299 $ 1,605,103 Segment operating income $ 348,132 $ 224,556 $ 191,227 Equity in earnings of joint venture $ 542 $ 12,236 $ 1,667 Long-lived assets $ 1,004,906 $ 509,598 $ 492,252 Investment in joint venture $ 8,412 $ 123,064 $ 110,520 Total assets $ 4,789,199 $ 2,429,890 $ 2,323,295 Capital expenditure $ 94,147 $ 57,551 $ 58,616 Depreciation and amortization $ 73,046 $ 46,167 $ 63,043 Constellation Beers and Spirits: Net sales: Imported beers $ 862,637 $ 776,006 $ 726,953 Spirits 284,551 282,307 274,702 Net sales $ 1,147,188 $ 1,058,313 $ 1,001,655 Segment operating income $ 252,533 $ 217,963 $ 178,805 Long-lived assets $ 80,388 $ 79,757 $ 78,516 Total assets $ 718,380 $ 700,545 $ 711,484 Capital expenditures $ 7,497 $ 8,722 $ 8,350 Depreciation and amortization $ 9,491 $ 9,732 $ 17,940 75