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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, 1994
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 ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------
Preferred $.40 Cumulative Stock, $10.00 par value, New York Stock Exchange
redeemable at company's option at $10.25 per share
plus unpaid accrued dividends; liquidating value
$10.00 per share plus unpaid accrued dividends
Class A Common Stock (voting) $.15 par value New York Stock Exchange
Class B Common Stock (nonvoting) $.15 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) None
of the Act
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. [_]
The aggregate market value, at April 30, 1994, of the voting stock held by
nonaffiliates of the registrant was $195,947,000.
The number of shares outstanding for each of the registrant's classes of Common
Stock on June 21, 1994 was:
Class A Common Stock (voting) 28,988,091
Class B Common Stock (nonvoting) 40,008,147
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Portions of the Registrant's 1994 Annual Report to Stockholders are incorporated
by reference into Parts I, II, and IV of this report. Portions of the Proxy
Statement of Registrant, dated July 5, 1994 for use in connection with the
Annual Meeting of Stockholders to be held July 28, 1994 are incorporated by
reference into Parts III and IV of this report.
PART I
Item 1. Business
- - ------- --------
(a) General development of business:
Brown-Forman Corporation 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 Kentucky in 1901. Its principal
executive offices are located at 850 Dixie Highway, Louisville, Kentucky 40210
(mailing address: P.O. Box 1080, Louisville, Kentucky 40201-1080). Except as
the context may otherwise indicate, the terms "Brown-Forman" and "company" refer
to Brown-Forman Corporation and its subsidiaries.
(b) Financial information about industry segments:
Information regarding net sales, operating income, and total assets of each of
the company's business segments is in Note 8 of Notes to Consolidated Financial
Statements on page 34 of the company's 1994 Annual Report to Stockholders, which
information is incorporated herein by reference in response to Item 8.
(c) Narrative description of business:
The following is a description of the operations in the business segments of
Wines and Spirits, Consumer Durables, and Other segments.
Wines and Spirits Segment
- - -------------------------
Wines 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, plastic
closures, and plastic bottles.
Brands are grouped into three categories: North American Spirits, Imported and
Specialty Spirits, and Wines.
North American Spirits consists of the following brands:
Jack Daniel's Tennessee Whiskey
Canadian Mist Canadian Whisky
Jack Daniel's Country Cocktails
Southern Comfort
Early Times Old Style Kentucky Whisky
Old Forester Kentucky Straight Bourbon Whisky
Gentlemen Jack Rare Tennessee Whiskey
Korbel California Brandy
Pepe Lopez Tequila and related products
Statistics based on case sales, published annually by a leading trade
publication, rank Jack Daniel's as the largest selling Tennessee whiskey in the
United States, Canadian Mist as the largest selling Canadian whisky in the
United States, Southern Comfort as the largest selling domestic proprietary
liqueur in the United States, and Early Times as the second largest selling
brand in the bourbon category in the United States.
-2-
Imported and Specialty Spirits consists of the following brands:
Bushmills Irish Whiskey and related products
Glenmorangie Single Highland Malt Scotch Whisky
Usher's Scotch Whisky
Sempe Armagnac
Wines consists of the following brands:
Fetzer Vineyards California Wines
Korbel California Champagnes
Bolla Italian Wines
Jekel Vineyards California Wines
Bel Arbors California Wines
Fontana Candida Italian Wines
Brolio Italian Wines
Carmen Vineyards Chilean Wines
Fontanafredda Italian Wines
Noilly Prat Vermouths
Armstrong Ridge California Champagne
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 imported table wine in the United States. Fetzer
was ranked sixteenth among all table wines.
Brown-Forman believes that statistics used to rank these products are reasonably
accurate.
Brown-Forman's policy with respect to the Wines and Spirits Segment is to market
high quality products that satisfy consumer preferences and 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
Brown-Forman has with many of its distributors have formulas which determine
reimbursement to distributors if Brown-Forman terminates 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
Brown-Forman's 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. Sugar and
spirits are used in the production of specialties. None of these raw materials
are in short supply, and there are adequate sources from which they may be
obtained.
-3-
Production of whiskies 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 business segments.
The industry is highly competitive and there are many brands sold in the
consumer market. Trade information indicates that Brown-Forman is 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, whisky must be aged for at least two years to be
designated "straight whisky." The Segment ages its straight whiskies for a
minimum of three to five years. Federal regulations also require that
"Canadian" whisky 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
Contemporary Dinnerware
Crystal Stemware
Crystal Barware
China and Crystal Giftware
China and Crystal Lamps
Collectibles
Sterling Silver, Pewter and Silver-Plated
Giftware and Holloware
Sterling Silver and Stainless Steel Flatware
Fine Table Linens
Luggage and Handbags
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.
The Segment's products are marketed domestically through authorized retail
stores consisting of department stores and jewelry and specialty 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 and/or distributors in selected foreign markets. Specially created
collectible products are distributed both domestically and in selected foreign
markets through the Segment's direct response/mail-order division.
-4-
Fine china and crystal products are marketed under both the Lenox and Gorham
trademarks. Contemporary dinnerware and glassware products are marketed under
the Dansk trademark. Sterling silver is marketed under both the Gorham and Kirk
Stieff trademarks. Kirk Stieff also markets pewter, stainless steel, and
silver-plated giftware, flatware and holloware. Luggage, handbags, business
cases, and personal accessories are marketed under the Hartmann, Wings and
Crouch & Fitzgerald trademarks. The direct response/mail-order sales in the
United States of specially designed collectibles are marketed under the Lenox,
Princeton Gallery and Gorham trademarks while such sales abroad are marketed
primarily under the Brooks & Bentley and Princeton Gallery trademarks.
The Lenox, Dansk, Gorham, and Hartmann brand names hold significant positions in
their industries. The Segment has granted to a producer of high quality table
linens a license for use of the Lenox trademarks on selective fine table linens,
subject to the terms of a licensing agreement.
The Segment believes that it is the largest domestic manufacturer and marketer
of fine china dinnerware, fine crystal stemware, and pewter holloware, 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 and contemporary dinnerware, crystal stemware and
giftware, and luggage products.
In the Segment's china and crystal businesses, competition is based primarily on
quality, design, brand, style, product appeal, consumer satisfaction and price.
In its luggage, handbag, 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 of the products. In its sterling
silver, silver-plated, and stainless steel business, competition is based
primarily on price, with quality, design, brand, style, product appeal, and
consumer satisfaction also being factors. In its pewter business, competition
is based primarily on quality, design, brand, and delivery, with price being a
less significant factor.
Clay is the principal raw material used to manufacture china products and silica
is the principal raw material used to manufacture 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, flatware, and holloware products, and tin is the
principal raw material used to manufacture pewter products. It is anticipated
that raw materials used by the Segment will be in adequate supply. The
acquisition price of fine silver and tin is, however, influenced significantly
by world-wide economic events and commodity trading.
Sales of certain Segment products are traditionally greater in the second
quarter of the fiscal year, primarily because of seasonal holiday buying.
Other Segment
- - -------------
The Other business segment included a credit card transaction processing
business and an aquaculture business. For further information, please refer to
Note 8, "Business Segment Information," on page 34 of the company's 1994 Annual
Report to Stockholders, which information is incorporated herein by reference in
response to Item 8. The credit card transaction processing business was sold in
October 1993 and the use of this segment was discontinued effective November 1,
1993.
-5-
Other Information
- - -----------------
As of April 30, 1994, the company employs approximately 7,100 persons, including
900 employed on a part-time basis.
The company is an equal opportunity employer and recruits and places employees
without regard to race, color, national origin, sex, age, religion, disability,
or veteran status.
The company believes its employee relations are good.
For information on the effects of compliance with federal, state, and local
environmental regulations, refer to Note 13, "Environomental," on page 36 of the
company's 1994 Annual Report to Stockholders, which information is incorporated
herein by reference in response to Item 8.
-6-
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:
Wines and Spirits Segment
- - -------------------------
The facilities of the Wines 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
- Frederiksted, St. Croix, U.S. Virgin Islands
- Mendocino County, California
- Monterey County, California
- Oak Barrels:
- Louisville, Kentucky
- Mendocino County, California
- Plastic Closures and Plastic Bottles:
- Louisville, Kentucky
. Bottling facilities:
- Lynchburg, Tennessee
- Louisville, Kentucky
- Frederiksted, St. Croix, U.S. Virgin Islands
- Monterey County, California
. Warehousing facilities:
- Lynchburg, Tennessee
- Louisville, Kentucky
- Collingwood, Ontario
- Shively, Kentucky
- Monterey County, California
- Mendocino County, California
Leased facilities:
. Production and bottling facility in Dublin, Ireland
. Wine production and bottling facility in Mendocino County, California
. Vineyards in Monterey County, California
The company believes that the productive capacities of the Wines and Spirits
Segment are adequate for the business, and such facilities are maintained in a
good state of repair.
-7-
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 headquarters - Lawrenceville, New Jersey
- Headquarters for Lenox Direct Response/Mail Order
Division - Langhorne, Pennsylvania
. Production and office facilities:
- Lenox - Pomona, New Jersey (includes retail store); Oxford, North
Carolina;
Kinston, North Carolina; and Mt. Pleasant, Pennsylvania
(includes retail store)
- Gorham - Smithfield, Rhode Island
- Hartmann - Lebanon, Tennessee
. Warehousing facilities:
- Dansk/Gorham - Williamsport, Maryland
Leased facilities:
. Office facilities:
- Lenox China and Crystal Division - Egg Harbor Township, New Jersey
- Dansk subsidiary - Mt. Kisco, New York
. Production/Warehousing/Office facilities:
- Kirk Stieff - Baltimore City, Maryland (includes retail store)
. Warehousing facilities:
- Lenox - South Brunswick, New Jersey (includes retail stores);
Oxford, North Carolina;
Kinston, North Carolina; and Mt. Pleasant, Pennsylvania
- Hartmann - Lebanon, Tennessee
- Lenox Direct Response/Mail Order - Langhorne, Pennsylvania
- Gorham - Woonsocket, Rhode Island
. Retail stores:
The Segment operates 6 first quality Lenox China stores in 5 states and 18
Lenox Outlet stores in 15 states. The Segment also operates 47 Dansk Outlet
stores in 27 states and 10 Gorham Outlet stores in 8 states. In addition, the
Segment operates 4 Crouch & Fitzgerald luggage stores in 4 states and a first
quality store in Connecticut under the Samuel Kirk & Son trade name which
carries Lenox, Gorham, Dansk, Kirk Stieff and other premium tabletop brands.
In the fourth quarter of fiscal 1994, the company recorded a pretax charge of
$8,180,000 ($5,350,000 after-tax) for the closing or reformatting of seven
retail stores.
The lease terms expire at various dates and are generally renewable, except for
the Lenox China store and Crouch & Fitzgerald store leases.
The company is of the opinion that the Segment's facilities are in good
condition and are adequate for the business.
-8-
Item 3. Legal Proceedings
- - ------- -----------------
(a) Brune v. Brown-Forman Corporation (214th District Court, Neuces County,
Texas):
On November 15, 1983, Marie Brinkmeyer, age 18, died of an acute alcohol
overdose after having consumed massive quantities of alcohol including
Pepe Lopez Tequila (a Brown-Forman product). Two years later, her
mother, Joyce Brune, sued Brown-Forman Corporation both on her own behalf
and on behalf of Ms. Brinkmeyer's estate, claiming (1) that the company
was negligent in not labeling Pepe Lopez Tequila to warn Ms. Brinkmeyer
of the risk of acute alcohol overdose or to provide instructions for the
appropriate use of the product and (2) that such failure rendered the
product defective. The plaintiff alleged damages resulting from the
company's advertising and alleged lobbying activities. The company
denied all of the plaintiff's allegations and vigorously contested this
litigation.
Plaintiff asked for actual damages of up to $5 million and punitive
damages of $600 million, plus interest and costs. The case went to trial
before a jury in Corpus Christi on August 31, 1992.
The jury's verdict against Brown-Forman of $525,000 plus interest
resulted from its finding Brown-Forman to be 35% at fault and Marie
Brinkmeyer to be 65% at fault on a total damage award of $1.5 million.
(Texas is a "comparative negligence" state.) The jury refused to award
punitive damages. The company has appealed the decision. Oral argument
was held on February 3, 1994 before the Texas Court of Appeals in Corpus
Christi. The company is awaiting a decision.
(b) Adams, et al. v. Brown-Forman Corporation (U.S. District Court, Middle
District of Florida, Tampa Division):
As previously reported, Brown-Forman Corporation terminated approximately
220 employees in a November 1986 reorganization. All terminated
employees received special compensation packages and signed complete
releases waiving any rights they might have as a result of their
termination. Nonetheless, the company was named as a defendant in four
related lawsuits, filed in 1988 and 1989, alleging violation of the Age
Discrimination in Employment Act (the "ADEA") related to this termination
process.
Three of the suits, collectively referred to as Adams, et al. v. Brown-
Forman Corporation, were filed by or on behalf of the same 44 plaintiffs;
the fourth suit was filed by the U.S. Equal Employment Opportunity
Commission (the "EEOC") on behalf of 104 individuals, including the Adams
plaintiffs. The lawsuits have been consolidated for trial in the U.S.
District Court for the Middle District of Florida. During the course of
this litigation, the EEOC has ceased representation of 19 individuals,
thus reducing the total to 85 individuals.
The 44 Adams plaintiffs have asserted their damages to be approximately
$62 million. The EEOC, using the same expert as that used by the
plaintiffs in the private actions, has determined the EEOC's damage claim
to be $43 million for the individuals on whose behalf it has brought
suit, bringing the total claimed to $105 million. The company and its
legal counsel consider this figure to exceed by far any liability to
which the company might be exposed. The company denies any liability to
the plaintiffs or individuals on whose part the EEOC has brought suit in
these matters and is vigorously contesting the litigation.
On June 17, 1992, the Eleventh Circuit Court of appeals reversed a
decision of the trial court and ruled in the company's favor that
"knowing and voluntary" written releases are valid, even when
-9-
plaintiffs are making ADEA claims. The company filed a motion for summary
judgment on the release and other issues. The magistrate judge heard
oral argument on January 5, 1993, and on September 30, 1993, made a
report and recommendation to the district court that the releases were
valid as to ten of the plaintiffs and recommended that their cases should
be dismissed. The magistrate judge found there were "genuine issues of
material fact" on the release and other issues with respect to the
remaining 75 plaintiffs, and recommended that the motion for summary
judgment be denied as to them.
Both sides filed exceptions to the magistrate judge's report and
recommendation. After the court makes a decision on the recommendation,
a trial date will be set for the remaining plaintiffs, if any.
For additional information on contingencies, see Note 15 in the Notes to
the Consolidated Financial Statements on page 36 of the company's 1994
Annual Report to Stockholders, which information is incorporated herein by
reference in response to Item 8.
Item 4. Submission of Matters to a Vote of Security Holders
------- ---------------------------------------------------
On April 25, 1994, the company solicited written consents to amend the
company's Restated and Amended Certificate of Incorporation to increase the
authorized shares of $.15 par value Class A Common Stock to 30,000,000 from
18,000,000 and $.15 par value Class B Common Stock to 60,000,000 from
36,000,000. The stockholders approved the amendment on May 18, 1994, which
became effective May 20, 1994, with the following pre-split votes cast:
Class A Class B
Common Stock Common Stock
------------ ------------
For 8,308,814 9,685,642
Against 13,244 26,239
Abstain 1,083 5,758
Broker non-votes -- --
-10-
EXECUTIVE OFFICERS OF THE REGISTRANT
- - ------------------------------------
Principal Occupation
and
Name Age Business Experience Family Relationship
- - ---------------------- --- -------------------- -------------------
W. L. Lyons Brown, Jr. 57 Chairman of the company Brother to Owsley
since July, 1993. Brown II; Cousin to
Chairman and Chief Owsley Brown Frazier
Executive Officer of the
company from May 1983
to July 1993.
Owsley Brown II 51 President and Chief Brother to W. L. Lyons
Executive Officer Brown, Jr.; Cousin to
of the company since Owsley Brown Frazier
July 1993. President
of the company from
July 1987 to July 1993.
Owsley Brown Frazier 58 Vice Chairman of the Cousin to W. L. Lyons
company since August Brown, Jr. and Owsley
1983. Brown II
William M. Street 55 Vice Chairman of the None
company since
July 1987.
John P. Bridendall 44 Senior Vice President None
and Director of
Corporate Development
since July 1987.
Russell C. Buzby 60 Senior Vice President None
and Executive Director
of Human Resources
and Information Services
since July 1987.
Michael B. Crutcher 50 Senior Vice President, None
General Counsel, and
Secretary since
May 1989.
Malcolm Jozoff /(1)/ 54 Chairman and Chief None
Executive Officer
of Lenox, Incorporated
(a subsidiary of the
company) since
October 1993.
Independent consultant
on marketing and
strategic planning
from June 1992 to
October 1993. Group
Vice President,
The Proctor & Gamble
Company, since 1985,
and President --
Health Care Products,
Procter & Gamble USA,
since 1991.
Lois A. Mateus 47 Senior Vice President None
of Corporate
Communications and
Corporate Services
since January 1988.
-11-
EXECUTIVE OFFICERS OF THE REGISTRANT
- - ------------------------------------
Clifford G. Rompf, Jr. 63 Senior Vice President None
and Executive Director
of Financial Operations
since July 1987.
/(1)/ In 1993, in connection with a civil proceeding brought by the Securities
and Exchange Commission, Mr. Jozoff consented, without admitting or denying the
allegations, to the entry of an order enjoining him from violating Section 10(b)
of the Securities Exchange Act of 1934.
PART II
Item 5. Market for the Registrant's Common Stock 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 1994 Annual Report to Stockholders, which information
is incorporated herein by reference.
Holders of record of Common Stock at June 15, 1994:
Class A Common Stock (Voting) 2,675
Class B Common Stock (Nonvoting) 4,793
The principal market for Brown-Forman Corporation 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
"11-Year Consolidated Selected Financial Data" appearing on pages 24 and 25 of
the 1994 Annual Report to Stockholders, which information is incorporated herein
by reference in response to Item 8.
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
"Financial Review" appearing on pages 20 through 23 of the 1994 Annual Report to
Stockholders, which information is incorporated herein by reference in response
to Item 8.
Item 8. Financial Statements and Supplementary Data
- - ------- -------------------------------------------
For the information required by this item, refer to the Report of Management,
Consolidated Financial Statements, Notes to Consolidated Financial Statements,
and Report of Independent Accountants appearing on pages 17 and 26 through 36 of
the 1994 Annual Report to Stockholders, which information is incorporated herein
by reference. For selected quarterly financial information, refer to the
section entitled "Quarterly Financial Information" appearing on the "Highlights"
page of the 1994 Annual Report to Stockholders, which information is
incorporated herein by reference.
-12-
Item 9. Changes in and Disagreements with Accountants on Accounting and
- - ------- ---------------------------------------------------------------
Financial Disclosure
--------------------
None
PART III
Item 10. Directors and Executive Officers of the Registrant
- - -------- --------------------------------------------------
For the information required by this item, refer to the following sections of
the registrant's definitive proxy statement for the Annual Meeting of
Stockholders to be held July 28, 1994, which information is incorporated herein
by reference: (a) "Election of Directors" on page 1 through the footnote on
page 2 (for information on directors); and (b) the last paragraph on page 4 (for
information on delinquent filings). Also, see the information with respect to
"Executive Officers of the Registrant" under Part I hereof, which information is
incorporated herein by reference.
Item 11. Executive Compensation
- - -------- ----------------------
For the information required by this item, refer to the section entitled
"Executive Compensation" on pages 5 through 13 of the registrant's definitive
proxy statement for the Annual Meeting of Stockholders to be held July 28, 1994,
which information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- - -------- --------------------------------------------------------------
For the information required by this item, refer to the section entitled
"Security Ownership of Certain Beneficial Owners and Management" appearing on
pages 3 and 4 of the registrant's definitive proxy statement for the Annual
Meeting of Stockholders to be held July 28, 1994, which information is
incorporated herein 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 13 of the registrant's
definitive proxy statement for the Annual Meeting of Stockholders to be held
July 28, 1994, which information is incorporated herein by reference.
-13-
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 the company's
Annual Report to Stockholders for the
year ended April 30, 1994:
Report of Management* -- 17
Consolidated Statement of Income for the
years ended April 30, 1994, 1993, and 1992* -- 26
Consolidated Statement of Cash Flows for the
years ended April 30, 1994, 1993, and 1992* -- 27
Consolidated Balance Sheet at April 30, 1994, 1993, and 1992* -- 28 - 29
Consolidated Statement of Stockholders' Equity
for the years ended April 30, 1994, 1993, and 1992* -- 30
Notes to Consolidated Financial Statements* -- 31 - 36
Report of Independent Accountants 36
Report of Independent Accountants S-1 --
Consolidated Financial Statement Schedules:
VIII - Valuation and Qualifying Accounts S-2 --
IX - Short-Term Borrowings S-3 --
X - Supplementary Income Statement Information S-4 --
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 herein.
(a) 3 - Exhibits:
Filed Herewith:
Exhibit Index
- - --------------
3(a) Restated Certificate of Incorporation of registrant.
3(b) Certificate of Amendment to Restated Certificate of Incorporation of
registrant.
-14-
3(c) Certificate of Ownership and Merger of Brown-Forman Corporation into
Brown-Forman, Inc.
3(d) Certificate of Amendment to Restated and Amended Certificate of
Incorporation of Brown-Forman Corporation.
10(a) Brown-Forman Management Incentive Compensation Plan.
10(b) Brown-Forman Corporation Restricted Stock Plan.
13 Company's Annual Report to Stockholders for the year ended April 30,
1994, but only to the extent set forth in Items 1, 3, 5, 6, 7, and 8
of the company's Annual Report on Form 10-K for the year ended April
30, 1994.
21 Subsidiaries of the Registrant.
23 Consent of Coopers & Lybrand, independent accountants.
Previously Filed:
Exhibit Index
- - -------------
3(e) The By-Laws of registrant, as amended on May 25, 1988, which is
incorporated herein by reference to Brown-Forman Corporation's 10-K
filed on July 26, 1993.
4(a) The Form of Indenture between the company and Morgan Guaranty Trust
Company of New York, as Trustee, dated as of April 1, 1988, which is
incorporated herein by reference to Brown-Forman Corporation's 10-K
filed on July 26, 1993.
4(b) The Form of Indenture dated as of March 1, 1994 between the company
and The First National Bank of Chicago, as Trustee, which is
incorporated herein by reference to Brown-Forman Corporation's Form
S-3 (Registration No. 33-52551) filed on March 8, 1994.
10(c) Brown-Forman Corporation Supplemental Excess Retirement Plan, which is
incorporated herein by reference to Brown-Forman Corporation's 10-K
filed on July 23, 1990.
10(d) Brown-Forman Corporation Stock Appreciation Rights Plan, which is
incorporated herein by reference to Brown-Forman Corporation's 10-K
filed on July 23, 1990.
10(e) A description of the Brown-Forman Savings Plan is incorporated herein
by reference to page 11 of the registrant's definitive proxy statement
for the Annual Meeting of Stockholders held on July 28, 1994.
10(f) A description of the Brown-Forman Flexible Reimbursement Plan is
incorporated herein by reference to page 11 of the registrant's
definitive proxy statement for the Annual Meeting of Stockholders held
on July 28, 1994.
(b) No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
-15-
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: June 28, 1994 By: Owsley Brown II
President 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 June 28, 1994 as indicated:
/s/ Owsley Brown Frazier /s/ John S. Speed
- - -------------------------- --------------------------- ---------------------------
By: Geo. Garvin Brown III By: Owsley Brown Frazier By: John S. Speed
Director Director, Vice Chairman Director
of the Board
/s/ William M. Street /s/ Stephen E. O'Neil /s/ James S. Welch
- - -------------------------- --------------------------- ---------------------------
By: William M. Street By: Stephen E. O'Neil By: James S. Welch
Director, Vice Chairman Director Director
of the Board
/s/ Owsley Brown II /s/ W. L. Lyons Brown, Jr. /s/ Clifford G. Rompf, Jr.
- - -------------------------- --------------------------- ---------------------------
By: Owsley Brown II By: W. L. Lyons Brown, Jr. By: Clifford G. Rompf, Jr.
Director, President and Director and Chairman Senior Vice President
Chief Executive Officer of the Board (Principal Accounting
(Principal Financial Officer) Officer)
-16-
REPORT OF INDEPENDENT ACCOUNTANTS
Brown-Forman Corporation
Louisville, Kentucky
We have audited the consolidated financial statements of Brown-Forman
Corporation and Subsidiaries as of April 30, 1994, 1993, and 1992, and for the
years then ended, which financial statements are included on pages 26 through 36
of the 1994 Annual Report to Stockholders of Brown-Forman Corporation and
incorporated by reference herein. We have also audited the financial statement
schedules listed in the index on page 14 of this Form 10-K. These financial
statements and financial statement schedules are the responsibility of the
company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Brown-Forman
Corporation and Subsidiaries as of April 30, 1994, 1993, and 1992 and the
consolidated results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles. In addition,
in our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
As discussed in Notes 2, 5, and 6 to the consolidated financial statements, in
1994 the company adopted changes in its methods of accounting for postretirement
benefits other than pensions, postemployment benefits, and contributions.
/s/ Coopers & Lybrand
- - ------------------------------
Coopers & Lybrand
Louisville, Kentucky
June 10, 1994
S-1
BROWN-FORMAN CORPORATION AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended April 30, 1994, 1993, and 1992
(Expressed in thousands)
Col. A Col. B Col. C Col. D Col. E
------ ------ ------ ------ ------
Additions
---------
Balance at Charged to Balance at
Beginning Costs Charged to End
Description of Period and Expenses Other Accounts Deductions of Period
----------- ---------- ------------ -------------- ---------- ----------
1994
Allowance for Doubtful Accounts $10,432 $10,538 $ -- $8,964(2) $12,006
1993
Allowance for Doubtful Accounts $ 7,970 $ 8,889 $ 307(1) $6,734(2) $10,432
1992
Allowance for Doubtful Accounts $ 5,940 $ 5,741 $3,203(1) $6,914(2) $ 7,970
(1) Relates to businesses acquired or sold during the year.
(2) Doubtful accounts written off, net of recoveries.
S-2
BROWN-FORMAN CORPORATION AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
For the Years Ended April 30, 1994, 1993, and 1992
(Expressed in thousands)
Col. A Col. B Col. C Col. D Col. E Col. F
------ ------ ------ ------ ------ ------
Category of Maximum Amount Average Amount Weighted Average
Aggregate Balance Weighted Outstanding Outstanding Interest Rate
Short-Term at End of Average During During During
Borrowings Period Interest Rate the Period (1) the Period (2) the Period (3)
- - ----------- --------- ------------- -------------- -------------- ----------------
Commercial
paper:
1994 $204,229(4) 3.8% $272,544 $74,351 3.5%
1993 -- -- 101,772 30,801 3.3
1992 20,772 3.9 69,504 22,179 5.2
Notes:
(1) Represents the maximum amount outstanding at month-end during the period.
(2) Calculated on daily outstanding balances during the year.
(3) Average amount outstanding during the year divided into interest expense
incurred.
(4) At April 30, 1994, $150,000,000 of this commercial paper was classified as
long-term debt in accordance with the company's intent and ability to
refinance obligations on a long-term basis.
S-3
BROWN-FORMAN CORPORATION AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the Years Ended April 30, 1994, 1993, and 1992
(Expressed in thousands)
Col. A Col. B
------ ------
Charged To Costs
Item And Expenses
---- ----------------
1994:
Taxes, other than payroll and income taxes:
Federal excise taxes $263,693
Advertising costs (a) $202,246
1993:
Taxes, other than payroll and income taxes:
Federal excise taxes $277,152
Advertising costs (a) $204,699
1992:
Taxes, other than payroll and income taxes:
Federal excise taxes $ 259,669
Advertising costs (a) $ 171,791
Note: (a) Advertising costs include all costs of advertising the company's
brand names and products. Such costs include point of sale displays
which are not practicable to segregate.
S-4