Robert Ryder, Executive Vice President and Chief Financial Officer, Constellation Brands [NYSE: STZ]
Sure. On the end you saw we did have good beer margin. I am sorry! Wine margin performance in the quarter. We expect that to continue for the full year. We just changed our guidance to be at the low end of sales growth and high end growth which means we will see margin expansion this year. Long term basis. We still expect the wine segment to maintain margins. I think there was some positive outcome this year mostly around cost of good soil which are really hoping recover margins from the last few years’ erosion but I wouldn’t expect big margin expansion in the wine segment go forward but we do expect to at least maintain margins and I think amount EBITDA and free cash flow.
You know, we continue, as you know we are spending a ton of money in the beer segment which we are quite happy to do because you know the return on capital net segment is north of 40% with a very quick payback and the EBITDA growth of the total company will be growing well in excess of a capital spending growth, even though the capital spending is growing so much and again a lot of that is driven by the beer segment, by the phenomenal EBITDA there, so I think in line of what we have been saying in the last 2 years, as we have pretty good visibility to getting our EBITDA leverage bellow 4 times I would say that the number 1 agenda item for use of free cash flow is returning it to shareholders and probably at the top of that list would be and initiation of a dividend. We are one of the few people, certainly with our financial profile and in beverage, alcohol, consumers in general, and consumer products in general but we don’t have a dividend. We are quite confident that this is really good cash flow generation will continue. We will probably be looking at dividend in the very near future.
Nick Mouldy, RBC Capital Markets
Great. Thanks for the answer. Real quick follow up on that dividend point. When you think about the initiation, are you thinking about something nominal to begin with or you think you can go closer to the payout ratio it appears from the get go just given the free cash flow generation of the company?
Robert Ryder, Executive Vice President and Chief Financial Officer, Constellation Brands [NYSE: STZ]
Yes, you know, we are still studying. We are taking some good outside advice but I would probably expect us to start on the lower side in order to give us a lot of room for increases but you know, we will look at the normal things like payout ratios and because we expect our EBITDA to grow, mostly behind beer, to grow so robustly over the next few years. If you kind of set a payout ratio and your net income keeps going up, we should have room to increase it but we probably start out at the lower end.
Nick Mouldy, RBC Capital Markets
Perfect. Awesome. Thank you so much!
Operator
Our next question comes from the line of Brian Blaney of Bank of America.
Brian Blaney, Bank of America
Hey! Good morning and Happy New Year everyone! I’ve got 2 questions. One just, Bob thinking you’re prepared remarks when you walk through the commentary on the mark to market activity. Your reference, there was USD 20 M loss relative to that activity in the quarter. Will that USD 20 M been included in results or was it excluded from the results?
Robert Ryder, Executive Vice President and Chief Financial Officer, Constellation Brands [NYSE: STZ]
Yes, sure. The USD 20 M was included in the gap results but we excluded from comparable earnings and you know the reason we do this when we, none of our commodity has just qualified for hedge accounting and we are hedging 3 years out, so you would see a lot of volubility in a quarter because you have been mark to market almost 3 years of hedges every quarter, right? So, we are kind of putting that stuff in non-comparable earnings. It is still in the press release,
