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United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2000
Commission file number 1-123
BROWN-FORMAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 61-0143150
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
850 Dixie Highway 40210
Louisville, Kentucky (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (502) 585-1100
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ----------------------
Class A Common Stock (voting) $0.15 par value New York Stock Exchange
Class B Common Stock (nonvoting) $0.15 par value New York Stock Exchange
Securities registered pursuant to
Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes |X| No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value, at April 30, 2000, of the voting and nonvoting
equity held by nonaffiliates of the registrant was approximately $1,900,000,000.
The number of shares outstanding for each of the registrant's classes of
Common Stock on June 30, 2000 was:
Class A Common Stock (voting) 28,988,091
Class B Common Stock (nonvoting) 39,530,582
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 2000 Annual Report to Stockholders are incorporated
by reference into Parts I, II, and IV of this report. Portions of the Proxy
Statement of Registrant for use in connection with the Annual Meeting of
Stockholders to be held July 27, 2000 are incorporated by reference into Part
III of this report.
PART I
Item 1. Business
(a) General development of business:
Brown-Forman Corporation ("we," "us," or "our" below) was incorporated under the
laws of the State of Delaware in 1933, successor to a business founded in 1870
as a partnership and subsequently incorporated under the laws of the
Commonwealth of Kentucky in 1901. Our principal executive offices are located at
850 Dixie Highway, Louisville, Kentucky 40210
(mailing address: P.O. Box 1080, Louisville, Kentucky 40201-1080).
(b) Financial information about industry segments:
Information regarding net sales, operating income, and total assets of each of
our business segments is in Note 11 of Notes to Consolidated Financial
Statements on pages 34 and 35 of our 2000 Annual Report to Stockholders, which
information is incorporated into this report by reference in response to Item 8.
(c) Narrative description of business:
The following is a description of our operations.
Wine and Spirits Segment
- ------------------------
Wine and Spirits operations include manufacturing, bottling, importing,
exporting, and marketing a wide variety of alcoholic beverage brands. This
Segment also manufactures and markets new and used oak barrels.
The Segment's brands consist of the following:
Jack Daniel's Tennessee Whiskey
Southern Comfort
Canadian Mist Canadian Whisky
Early Times Kentucky Whisky
Finlandia Vodkas*
Old Forester Kentucky Straight Bourbon Whisky
Glenmorangie Single Highland Malt Scotch Whiskies*
Jack Daniel's Country Cocktails
Gentleman Jack Rare Tennessee Whiskey
Jack Daniel's Single Barrel Tennessee Whiskey
Woodford Reserve Kentucky Straight Bourbon Whiskey
Fetzer Vineyards California Wines
Korbel California Champagnes and Wines*
Bolla Italian Wines
Sonoma-Cutrer Chardonnay Wines
Bushmills Irish Whiskey*
Black Bush Special Irish Whiskey*
Bushmills Malt Single Malt Irish Whiskey*
Ardberg Single Islay Malt Scotch Whisky*
Glen Moray Single Speyside Malt Scotch Whisky*
Pepe Lopez Tequilas
Korbel California Brandy*
2
BlueGrass Kentucky Whiskey
Usher's Scotch Whisky*
Jack Daniel's & Cola
Southern Comfort & Cola
Don Eduardo Tequilas*
Tuaca Liqueur*
Jekel Vineyards California Wines
Bonterra Vineyards California Wines
Michel Picard French Wines*
Bel Arbor California Wines
Fontana Candida Italian Wines*
McPherson Australian Wines*
Owen's Estate Australian Wines*
Armstrong Ridge California Champagne*
Noilly Prat Vermouths*
* Brands represented in the U.S and other select markets by Brown-Forman
Statistics based on case sales, published annually by a leading trade
publication, rank Jack Daniel's as the largest selling bourbon or Tennessee
whiskey in the United States, Canadian Mist as the largest selling Canadian
whiskey in the United States, and Southern Comfort as the largest selling
domestic proprietary liqueur in the United States.
A leading industry trade publication reported Korbel California Champagnes as
the largest selling premium champagne in the United States. This trade
publication also reported that, among numerous imported wines, Bolla Italian
Wine is the leading premium Italian table wine in the United States. Fetzer was
ranked eighth among California varietal wines and seventeenth among all domestic
table wines.
We believe the statistics used to rank these products are reasonably accurate.
Our strategy with respect to the Wine and Spirits Segment is to market high
quality products that satisfy consumer preferences and to support them with
extensive international, national, and regional marketing programs. These
programs are intended to extend consumer brand recognition and brand loyalty.
Sales managers and representatives or brokers represent the Segment in all
states. The Segment distributes its spirits products domestically either through
state agencies or through wholesale distributors. The contracts which we have
with many of our distributors have formulas which determine reimbursement to
distributors if we terminate them; the amount of reimbursement is based
primarily on the distributor's length of service and a percentage of its
purchases over time. Some states have statutes which limit our ability to
terminate distributor contracts.
Jack Daniel's Tennessee Whiskey and Southern Comfort are the principal products
exported by the Segment. These brands are sold through contracts with brokers
and distributors in most countries.
The principal raw materials used in manufacturing and packaging distilled
spirits are corn, rye, malted barley, glass, cartons, and wood for new white oak
barrels, which are used for storage of bourbon and Tennessee whiskey. None of
these raw materials are in short supply, and there are adequate sources from
which they may be obtained.
3
The principal raw materials used in the production of wines are grapes and
packaging materials. Grapes are primarily purchased from independent growers
and, from time to time, are adversely affected by weather and other forces which
may limit production. We believe that our relationships with our growers are
good.
Due to aging requirements, production of whiskeys is scheduled to meet demand
three to five years in the future. Accordingly, inventories are larger in
relation to sales and total assets than would be normal for most other
businesses.
The industry is highly competitive and there are many brands sold in the
consumer market. Trade information indicates that we are one of the largest wine
and spirit suppliers in the United States in terms of revenues.
The wine and spirits industry is regulated by the Bureau of Alcohol, Tobacco,
and Firearms of the United States Treasury Department with respect to
production, blending, bottling, sales, advertising, and transportation of its
products. Also, each state regulates advertising, promotion, transportation,
sale, and distribution of such products.
Under federal regulations, whiskey must be aged for at least two years to be
designated "straight whiskey." The Segment ages its straight whiskeys for a
minimum of three to five years. Federal regulations also require that "Canadian"
whiskey must be manufactured in Canada in compliance with Canadian laws and must
be aged in Canada for at least three years.
Consumer Durables Segment
- -------------------------
The Consumer Durables Segment includes the manufacturing and/or marketing of the
following:
Fine China Dinnerware
Casual Dinnerware and Glassware
Crystal Stemware
Crystal Barware
China and Crystal Giftware
Collectibles and Jewelry
Sterling Silver, Pewter and Silver-Plated Giftware
Sterling Silver and Stainless Steel Flatware
Contemporary Tabletop, Houseware and Giftware
Luggage
Business Cases and Folios
Personal Leather Accessories
All of the products of the Segment are sold by segment-employed sales
representatives under various compensation arrangements, and where appropriate
to the class of trade, by specialized independent commissioned sales
representatives and independent distributors.
4
The Segment's products are marketed domestically through authorized retail
stores consisting of department stores and specialty and jewelry shops and
through retail stores operated by the Segment. Products are also distributed
domestically through the institutional, incentive, premium, business gift and
military exchange classes of trade, and internationally through authorized
retailers, duty free stores and/or distributors in selected foreign markets.
Specially created collectible products are distributed both domestically and in
selected foreign markets through the direct response channel, including
mail-order, catalogs and the internet, as well as through authorized collectible
retailers.
Fine china and casual dinnerware, as well as fine china giftware, are marketed
under the Lenox trademark. Crystal stemware, barware and giftware are marketed
under both the Lenox and Gorham trademarks. Contemporary tabletop, houseware and
giftware products are marketed under the Dansk trademark. Sterling silver and
stainless flatware and sterling giftware are marketed under the Gorham and
"Lenox. Kirk Stieff" trademarks. Pewter and silver-plated giftware products are
also marketed under the "Lenox. Kirk Stieff" trademark. Luggage, business cases,
and personal leather accessories are marketed under the Hartmann, Wings, and
hStudio trademarks. The direct response sales in the United States of specially
designed collectibles are marketed under the Lenox and Gorham trademarks, while
such sales abroad are marketed primarily under the Brooks & Bentley trademark.
The Lenox, Gorham, and Hartmann brand names hold significant positions in their
industries. The Segment has granted licenses for the use of the Lenox trademark
on selected fine table linens, wall coverings, lamps and other electrical
lighting products, and candles, subject to the terms of licensing agreements.
We believe the Segment is the largest domestic manufacturer and marketer of fine
china dinnerware and the only significant domestic manufacturer of fine quality
china giftware. The Segment is also a leading manufacturer and distributor of
fine quality luggage, business cases, and personal leather accessories. The
Segment competes with a number of other companies and is subject to intense
foreign competition in the marketing of its fine china, contemporary and casual
dinnerware, crystal stemware and giftware, stainless flatware, and luggage
products.
In the Segment's china and stainless businesses, competition is based primarily
on quality, design, brand, style, product appeal, consumer satisfaction, and
price. In its luggage, business case and personal leather accessories business,
competition is based primarily on brand awareness, quality, design, style, and
price. In its direct response/mail-order business, the most important
competitive factors are the brand, product appeal, design, sales/marketing
program, service, and price. In its crystal, sterling silver, silver-plated, and
pewter businesses, competition is based primarily on price, with quality,
design, brand, style, product appeal, and consumer satisfaction also being
factors.
Clay and feldspar are the principal raw materials used to manufacture china
products and silica is the principal raw material used to manufacture crystal
products. Gold and platinum are significant raw materials used to decorate china
and crystal products. Leather and nylon fabric are the principal raw materials
used to manufacture luggage and business cases. Fine silver is the principal raw
material used to manufacture sterling silver giftware and flatware products; tin
is the principal raw material used to manufacture pewter products; and stainless
steel is the principal raw material used to manufacture stainless steel
flatware. It is anticipated that raw materials used by the Segment will be in
adequate supply. However, the acquisition price of gold, platinum, fine silver,
and tin is influenced significantly by worldwide economic events and commodity
trading.
Sales of certain Segment products are traditionally greater in the first half of
the fiscal year, primarily because of seasonal holiday buying.
5
Other Information
- -----------------
As of April 30, 2000, we employ approximately 7,400 persons, including 1,400
employed on a part-time or temporary basis.
We are an equal opportunity employer and we recruit and place employees without
regard to race, color, religion, national or ethnic origin, veteran status, age,
gender, sexual preference, or physical or mental disability.
We believe our employee relations are good.
For information on the effects of compliance with federal, state, and local
environmental regulations, refer to Note 13, "Environmental," on page 35 of our
2000 Annual Report to Stockholders, which information is incorporated into this
report by reference in response to Item 8.
Item 2. Properties
The corporate offices consist of office buildings, including renovated historic
structures, all located in Louisville, Kentucky.
Significant properties by business segments are as follows:
Wine and Spirits Segment
- ------------------------
The facilities of the Wine and Spirits Segment are shown below. The owned
facilities are held in fee simple.
Owned facilities:
- - Production facilities:
- Distilled Spirits and Wines:
- Lynchburg, Tennessee
- Louisville, Kentucky
- Collingwood, Ontario
- Shively, Kentucky
- Woodford County, Kentucky
- Frederiksted, St. Croix, U.S. Virgin Islands
- Mendocino County, California
- Monterey County, California
- Sonoma County, California
- Pedemonte, Italy
- Soave, Italy
- - Warehousing facilities:
- Lynchburg, Tennessee
- Louisville, Kentucky
- Collingwood, Ontario
- Shively, Kentucky
- Woodford County, Kentucky
- Mendocino County, California
- Monterey County, California
- Sonoma County, California
- Pedemonte, Italy
- Soave, Italy
6
Leased facilities:
- - Production and bottling facility in Dublin, Ireland
- - Wine production and warehousing facility in Mendocino County, California
- - Vineyards in Monterey County, California
We believe that the productive capacities of the Wine and Spirits Segment are
adequate for the business, and that the facilities are maintained in a good
state of repair.
Consumer Durables Segment
- -------------------------
The facilities of the Consumer Durables Segment are shown below. The owned
facilities are held in fee simple.
Owned facilities:
- - Office facilities:
- Lenox corporate - Lawrenceville, New Jersey
- Headquarters for Lenox Direct Response/Collectibles
Division (includes retail store and warehouse) - Langhorne,
Pennsylvania
- - Production and office facilities:
- Lenox - Pomona, New Jersey (includes retail store); Oxford,
North Carolina (includes retail store); Kinston,
North Carolina; and Mt. Pleasant, Pennsylvania
(includes retail store)
- Lenox/Gorham - Smithfield, Rhode Island
(includes retail store)
- Hartmann - Lebanon, Tennessee (includes retail store)
- - Warehousing facilities:
- Lenox/Dansk/Gorham - Williamsport, Maryland
Leased facilities:
- - Office facilities:
- Dansk headquarters - White Plains, New York
- Norfolk headquarters - Wilmington, Delaware
- Brooks & Bentley headquarters - Kent, England
- Hartmann (includes showroom) - New York, New York
- - Warehousing facilities:
- Lenox - South Brunswick, New Jersey (includes retail store);
Oxford, North Carolina; Kinston, North Carolina; and
Mt. Pleasant, Pennsylvania
- Hartmann - Lebanon, Tennessee
- - Retail stores:
- The Segment operates 42 Lenox outlet stores in 26 states and
a Lenox Gift Express store in Pennsylvania. The Segment also
operates 51 Dansk stores in 28 states. In addition, the
Segment operates 4 Hartmann luggage outlet stores in 4 states.
- - Showrooms:
- Lenox/Dansk/Gorham - New York, New York; Dallas, Texas;
Atlanta, Georgia; Ontario, Canada
7
The lease terms expire at various dates and are generally renewable.
We believe that the Segment's facilities are in good condition and are adequate
for the business.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
Principal Occupation and
Name Age Business Experience
---- --- ---------------------------------
Owsley Brown II 57 Chairman of the company since
July 1995. Chief Executive Officer
of the company since July 1993.
President of the company
from July 1987 to July 1995.
William M. Street 61 Vice Chairman of the company
since July 1987.
Steven B. Ratoff 57 Executive Vice President and Chief
Financial Officer of the company
since December 1994.
John P. Bridendall 50 Senior Vice President and
Director of Corporate
Development since July 1987.
Michael B. Crutcher 56 Senior Vice President, General
Counsel, and Secretary since
May 1989.
Lois A. Mateus 53 Senior Vice President of Corporate
Communications and Corporate
Services since January 1988.
Stanley E. Krangel 49 President of Lenox, Incorporated
(a subsidiary of Brown-Forman) since
June 1998. President of Lenox
Collections from November 1995 to
June 1998.
8
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
Except as presented below, for the information required by this item refer to
the section entitled "Quarterly Financial Information" appearing on the
"Highlights" page of the 2000 Annual Report to Stockholders, which information
is incorporated into this report by reference.
Holders of record of Common Stock at April 30, 2000:
Class A Common Stock (Voting) 3,728
Class B Common Stock (Nonvoting) 4,749
The principal market for Brown-Forman common shares is the New York Stock
Exchange.
Item 6. Selected Financial Data
For the information required by this item, refer to the section entitled
"Selected Financial Data" appearing on page 17 of the 2000 Annual Report to
Stockholders, which information is incorporated into this report by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
For the information required by this item, refer to the section entitled
"Management's Discussion and Analysis" appearing on pages 18 through 24 of the
2000 Annual Report to Stockholders, which information is incorporated into this
report by reference.
Risk Factors Affecting Forward-Looking Statements:
From time to time, we may make forward-looking statements related to our
anticipated financial performance, business prospects, new products, and similar
matters. We make several such statements in the discussion and analysis referred
to above, but we do not guarantee that the results indicated will actually be
achieved.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. To comply with the terms of the safe harbor, we note
that the following non-exclusive list of important risk factors could cause our
actual results and experience to differ materially from the anticipated results
or other expectations expressed in those forward-looking statements:
Generally: We operate in highly competitive markets. Our business is
subject to changes in general economic conditions, changes in consumer
preferences, the degree of acceptance of new products, and the
uncertainties of litigation. As our business continues to expand
outside the United States, our financial results are more exposed to
foreign exchange rate fluctuations and the health of foreign economies.
9
Beverage Risk Factors: The U.S. beverage alcohol business is highly
sensitive to tax increases; an increase in the federal excise tax
(which we do not anticipate at this time) would depress our domestic
beverage business. Our current outlook for our domestic beverage
business anticipates continued success of Jack Daniel's Tennessee
whiskey, Southern Comfort, and our other core spirits brands. Current
expectations from our foreign beverage business could prove to be
optimistic if the U.S. dollar strengthens against other currencies or
if economic conditions deteriorate in the principal countries where we
export our beverage products, including the United Kingdom, Germany,
Japan, and Australia. The wine and spirits business, both in the United
States and abroad, is also sensitive to political and social trends.
Legal or regulatory measures against beverage alcohol (including its
advertising and promotion) could adversely affect sales. Product
liability litigation against the alcohol industry, while not currently
a major risk factor, could become significant if new lawsuits were
filed against alcohol manufacturers. Current expectations for our
global beverage business may not be met if consumption trends do not
continue to increase. Profits could also be affected if grain or grape
prices increase.
Consumer Durables Risk Factors: Earnings projections for our consumer
durables segment anticipate a continued strengthening of our Lenox and
Hartmann businesses. These projections could be offset by factors such
as poor consumer response to direct mail, a soft retail environment at
outlet malls, further department store consolidation, or weakened
demand for tableware, giftware and/or leather goods.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
For the information required by this item, refer to the section entitled "Market
Risks" appearing on page 24 of the 2000 Annual Report to Stockholders, which
information is incorporated into this report by reference.
Item 8. Financial Statements and Supplementary Data
For the information required by this item, refer to the Consolidated Financial
Statements, Notes to Consolidated Financial Statements, and Report of Management
appearing on pages 25 through 37 of the 2000 Annual Report to Stockholders,
which information is incorporated into this report by reference, and the Report
of Independent Accountants included on page S-1 of this report. For selected
quarterly financial information, refer to the section entitled "Quarterly
Financial Information" appearing on the "Highlights" page of the 2000 Annual
Report to Stockholders, which information is incorporated into this report by
reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
10
PART III
Item 10. Directors and Executive Officers of the Registrant
For the information required by this item, refer to the following sections of
our definitive proxy statement for the Annual Meeting of Stockholders to be held
July 27, 2000, which information is incorporated into this report by reference:
(a) "Election of Directors" on page 4 through the fourth paragraph on page 5
(for information on directors); and (b) the last paragraph on page 7 (for
information on delinquent Section 16 filings). Also, see the information with
respect to "Executive Officers of the Registrant" under Part I of this report,
which information is incorporated herein by reference.
Item 11. Executive Compensation
For the information required by this item, refer to the following sections of
our definitive proxy statement for the Annual Meeting of Stockholders to be held
July 27, 2000, which information is incorporated into this report by reference:
(a) "Executive Compensation" on pages 8 through 11; (b) "Retirement Plan
Descriptions" on page 12; and (c) "Director Compensation" on page 13.
Item 12. Security Ownership of Certain Beneficial Owners and Management
For the information required by this item, refer to the section entitled "Stock
Ownership" appearing on pages 6 through 7 of our definitive proxy statement for
the Annual Meeting of Stockholders to be held July 27, 2000, which information
is incorporated into this report by reference.
Item 13. Certain Relationships and Related Transactions
For the information required by this item, refer to the section entitled
"Transactions with Management" appearing on page 15 of our definitive proxy
statement for the Annual Meeting of Stockholders to be held July 27, 2000, which
information is incorporated into this report by reference.
11
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1 and 2 - Index to Consolidated Financial Statements and Schedules:
Reference
Annual
Form 10-K Report to
Annual Report Stockholders
Page Page(s)
Incorporated by reference to our Annual
Report to Stockholders for the year
ended April 30, 2000:
Consolidated Statement of Income for the
years ended April 30, 1998, 1999, and 2000* -- 25
Consolidated Balance Sheet at April 30, 1998, 1999, and 2000* -- 26 - 27
Consolidated Statement of Cash Flows for the
years ended April 30, 1998, 1999, and 2000* -- 28
Consolidated Statement of Stockholders' Equity
for the years ended April 30, 1998, 1999, and 2000* -- 29
Notes to Consolidated Financial Statements* -- 30 - 36
Report of Management* -- 37
Report of Independent Accountants S-1 --
Consolidated Financial Statement Schedule:
II - Valuation and Qualifying Accounts S-2 --
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission have been omitted either
because they are not required under the related instructions, because the
information required is included in the consolidated financial statements and
notes thereto, or because they are inapplicable.
* Incorporated by reference to Item 8 in this report.
(a) 3 - Exhibits: Filed with this report:
Exhibit Index
- -------------
13 Brown-Forman Corporation's Annual Report to Stockholders for the
year ended April 30, 2000, but only to the extent set forth in
Items 1, 5, 6, 7, 7A and 8 of this Annual Report on Form 10-K for
the year ended April 30, 2000.
21 Subsidiaries of the Registrant.
23 Consent of PricewaterhouseCoopers LLP independent accountants.
12
27 Financial Data Schedule (not considered to be filed).
Previously Filed:
Exhibit Index
- -------------
3(a) Restated Certificate of Incorporation of registrant, which is
incorporated into this report by reference to Brown-Forman
Corporation's Form 10-K filed on July 19, 1994.
3(b) Certificate of Amendment to Restated Certificate of Incorporation
of registrant, which is incorporated into this report by reference
to Brown-Forman Corporation's Form 10-K filed on July 19, 1994.
3(c) Certificate of Ownership and Merger of Brown-Forman Corporation
into Brown-Forman, Inc., which is incorporated into this report by
reference to Brown-Forman Corporation's Form 10-K filed on July 19,
1994.
3(d) Certificate of Amendment to Restated and Amended Certificate of
Incorporation of Brown-Forman Corporation, which is incorporated
into this report by reference to Brown-Forman Corporation's Form
10-K filed on July 19, 1994.
3(e) The by-laws of registrant, as amended on May 25, 2000, which is
incorporated into this report by reference to Brown-Forman
Corporation's Form 8-K filed on May 31, 2000.
4 The Form of Indenture dated as of March 1, 1994 between
Brown-Forman Corporation and The First National Bank of Chicago, as
Trustee, which is incorporated into this report by reference to
Brown-Forman Corporation's Form S-3 (Registration No. 33-52551)
filed on March 8, 1994.
10(a) A description of the Brown-Forman Omnibus Compensation Plan, which
is incorporated into this report by reference to the Appendix of
the registrant's definitive proxy statement for the Annual Meeting
of Stockholders held on July 27, 1995.
10(b) Brown-Forman Corporation Restricted Stock Plan, which is
incorporated into this report by reference to Brown-Forman
Corporation's Form 10-K filed on July 19, 1994.
10(c) Brown-Forman Corporation Supplemental Excess Retirement Plan, which
is incorporated into this report by reference to Brown-Forman
Corporation's Form 10-K filed on July 23, 1990.
10(d) Brown-Forman Corporation Stock Appreciation Rights Plan, which is
incorporated into this report by reference to Brown-Forman
Corporation's Form 10-K filed on July 23, 1990.
10(e) A description of the Brown-Forman Savings Plan, which is
incorporated into this report by reference to page 10 of the
registrant's definitive proxy statement for the Annual Meeting of
Stockholders held on July 25, 1996.
10(f) A description of the Brown-Forman Flexible Reimbursement Plan,
which is incorporated into this report by reference to page 10 of
the registrant's definitive proxy statement for the Annual Meeting
of Stockholders held on July 25, 1996.
13
10(g) A description of the Brown-Forman Non-Employee Director
Compensation Plan, which is incorporated into this report by
reference to Brown-Forman Corporation's Form S-8 (Registration No.
333-38649) filed on October 24, 1997.
10(h) Credit Agreement dated as of October 29, 1997, among Brown-Forman
Corporation and a group of United States and international banks,
which is incorporated into this report by reference to Amendment
No. 1 to Brown-Forman Corporation's Form 10-Q filed on December 15,
1997.
(b) Reports on Form 8-K:
On May 31, 2000, the Registrant filed a report on Form 8-K regarding an
amendment to the Registrant's by-laws that decreased the minimum number of
directors sitting on the Executive Committee from three to two (including
the Chief Executive Officer).
On June 5, 2000, the Registrant filed a report on Form 8-K announcing that
Steven B. Ratoff, Chief Financial Officer of the Registrant, would be
transitioning from that post.
14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BROWN-FORMAN CORPORATION
(Registrant)
/s/ OWSLEY BROWN II
------------------------------------
Date: May 25, 2000 By: Owsley Brown II
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities on May 25, 2000 as indicated:
/s/ JERRY E. ABRAMSON /s/ RICHARD P. MAYER /s/ OWSLEY BROWN II
- --------------------------------------- --------------------------------- -----------------------------------------
By: Jerry E. Abramson By: Richard P. Mayer By: Owsley Brown II
Director Director Director, Chairman of the Board
and Chief Executive Officer
/s/ BARRY D. BRAMLEY
- ---------------------------------------
By: Barry D. Bramley
Director
/s/ GEO. GARVIN BROWN III /s/ DACE BROWN STUBBS /s/ OWSLEY BROWN FRAZIER
- --------------------------------------- --------------------------------- -----------------------------------------
By: Geo. Garvin Brown III By: Dace Brown Stubbs By: Owsley Brown Frazier
Director Director Director, Vice Chairman of the Board
/s/ LAWRENCE K. PROBUS /s/ STEVEN B. RATOFF /s/ WILLIAM M. STREET
- --------------------------------------- --------------------------------- -----------------------------------------
By: Lawrence K. Probus By: Steven B. Ratoff By: William M. Street
Vice President and Controller Executive Vice President and Director, Vice Chairman of the Board
(Principal Accounting Officer) Chief Financial Officer
(Principal Financial Officer)
15
REPORT OF INDEPENDENT ACCOUNTANTS
Brown-Forman Corporation
Louisville, Kentucky
In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of
Brown-Forman Corporation and its subsidiaries at April 30, 1998, 1999, and 2000,
and the results of their operations and their cash flows for each of the three
years in the period ended April 30, 2000, in conformity with accounting
principles generally accepted in the United States. In addition, in our opinion,
the financial statement schedule listed in the accompanying index presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ PricewaterhouseCoopers LLP
Louisville, Kentucky
May 25, 2000, except as to Note 15,
for which the date is June 15, 2000
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BROWN-FORMAN CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended April 30, 1998, 1999, and 2000
(Expressed in thousands)
Col. A Col. B Col. C Col. D Col. E
------ ------ ------ ------ ------
Additions
Balance at Charged to Balance at
Beginning Costs End
Description of Period and Expenses Deductions of Period
----------- ---------- ------------ ---------- ----------
1998
Allowance for Doubtful Accounts $10,220 $ 6,648 $ 5,906(1) $10,962
1999
Allowance for Doubtful Accounts $10,962 $ 7,582 $ 7,385(1) $11,159
2000
Allowance for Doubtful Accounts $11,159 $ 5,833 $ 5,346(1) $11,646
(1) Doubtful accounts written off, net of recoveries.
S-2