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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, 1997
Commission file number 1-123
BROWN-FORMAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 61-0143150
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
850 Dixie Highway
Louisville, Kentucky 40210
(Address of principal executive offices) (Zip Code)
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) 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. [ ]
The aggregate market value, at April 30, 1997, of the voting stock held by
nonaffiliates of the registrant was $403,708,767.
The number of shares outstanding for each of the registrant's classes of Common
Stock on May 28, 1997 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 1997 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 24, 1997 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 page 35 of our 1997 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.
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.
The Segment's brands consist of the following:
Tennessee Whiskeys
Jack Daniel's
Jack Daniel's Single Barrel
Jack Daniel's Master Distiller
Gentleman Jack
Kentucky Straight Bourbon Whiskeys
Old Forester
Forester 1870
Early Times
Woodford Reserve
Kentucky Whiskey
Early Times
-2-
Canadian Mist
Southern Comfort
Pepe Lopez Tequilas
Korbel California Brandy*
Jack Daniel's Country Cocktails
Finlandia Vodkas**
Bushmills Irish Whiskeys**
Black Bush Special Irish Whiskey**
Glenmorangie Single Highland Malts**
Usher's Scotch Whisky**
Jack Daniel's & Cola
Southern Comfort & Cola
Tropical Freezes
Oblio Sambucas**
Jack Daniel's Oak-aged Beers
California Wines
Fetzer Veneyards
Korbel Champagnes*
Jekel Vineyards
Bel Arbor
Armstrong Ridge*
Italian Wines
Bolla
Fontana Candida**
Brolio**
Fontanafredda**
Carmen Vineyards Chilean Wines**
Michel Picard French Wines**
Noilly Prat Vermouths**
* Brands marketed by Brown-Forman worldwide by agency agreement.
** Brands marketed by Brown-Forman in the U.S. and other select markets by
agency agreements.
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 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 thirteenth among all domestic table wines.
We believe the statistics used to rank these products are reasonably accurate.
-3-
Our strategy with respect to the Wines 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.
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 wines 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 a 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.
-4-
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
China Lamps
Collectibles and Jewelry
Sterling Silver, Pewter and Silver-Plate Giftware
Sterling Silver and Stainless Steel Flatware
Contemporary Tabletop, Houseware and Giftware
Fine Table Linens
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.
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 and/or distributors in selected foreign markets. Specially created
collectible products are distributed both domestically and in selected foreign
markets through the direct response/mail-order channel, 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 Collection" trademarks. Pewter and silver-plated giftware
products are also marketed under the "Lenox. Kirk Stieff Collection" trademark.
Luggage, business cases, and personal leather accessories are marketed under the
Hartmann, Wings, Veronica Hart, 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 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 and premium collector plates, subject to the terms
of licensing agreements.
The Segment believes that it is the largest domestic manufacturer and marketer
of fine china dinnerware and fine crystal stemware, 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
-5-
competition in the marketing of 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 of the products. 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 second
quarter of the fiscal year, primarily because of seasonal holiday buying.
Other Information
- -----------------
As of April 30, 1997, we employ approximately 7,500 persons, including 1,050
employed on a part-time basis.
We are an equal opportunity employer and we recruit and place employees without
regard to race, color, national origin, sex, age, religion, disability, or
veteran status.
We believe our employee relations are good.
For information on the effects of compliance with federal, state and local
environmental regulations, refer to Note 14, "Environmental," on page 35 of our
1997 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.
-6-
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
- Woodford County, Kentucky
- Frederiksted, St. Croix, U.S. Virgin Islands
- Mendocino County, California
- Monterey County, California
- Pedemonte, Italy
- Soave, Italy
- Oak Barrels:
- Louisville, Kentucky
- Mendocino County, California
- Plastic Closures and Plastic Bottles:
- Louisville, Kentucky
. Bottling facilities:
- Lynchburg, Tennessee
- Louisville, Kentucky
- Woodford County, Kentucky
- Frederiksted, St. Croix, U.S. Virgin Islands
- Mendocino County, California
- Monterey County, California
- Pedemonte, Italy
. Warehousing facilities:
- Lynchburg, Tennessee
- Louisville, Kentucky
- Collingwood, Ontario
- Shively, Kentucky
- Woodford County, Kentucky
- Mendocino County, California
- Monterey County, California
- Pedemonte, Italy
- Soave, Italy
-7-
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 wines 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 - 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 (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
. Production/Warehousing/Office facilities:
- Kirk Stieff - Baltimore, Maryland (includes retail store)
. 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 36 Lenox outlet stores in 26 states and a Lenox
Gift Express store in Pennsylvaina. The Segment also operates 63
Dansk stores in 31 states. In addition, the Segment operates 2
Crouch & Fitzgerald luggage stores in 2 states and 1 Hartmann
luggage outlet store in Florida.
The lease terms expire at various dates and are generally renewable, except for
the Crouch & Fitzgerald store leases.
We believe that the Segment's facilities are in good condition and are adequate
for the business.
-8-
Item 3. Legal Proceedings
Expansion Plus, Inc. v. Brown-Forman Corporation, et al., (United States
District Court for the Southern District of Texas, Houston Division, Civil
Action No. H-94-3498.)
As we reported earlier, we bought a start-up credit card processing business in
1988 from Expansion Plus, Inc. ("EPI"). We built up this business substantially,
and sold it in 1993 for $31.2 million. Months after the sale, EPI claimed that
we had never acquired full title to the business, that we had to return all or
part of it to EPI, and that our sale of the business to a third party
represented a conversion of EPI's assets.
In October, 1994, EPI filed a tort action against the buyer and us alleging
conversion of property, tortious interference with contractual relationships,
misappropriation of trade secrets, and breach of a confidential relationship.
EPI sought damages of $31.2 million plus punitive damages in an amount ten times
actual damages.
On January 30, 1997, the trial judge entered summary judgment in our favor,
dismissing all of EPI's claims. EPI has appealed to the Federal Appeals Court
for the Fifth Circuit.
Our counsel have advised us, and it is our opinion, that the disposition of
this suit will not have a material adverse effect on our consolidated financial
position or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
Principal Occupation and
Name Age Business Experience Family Relationship
- --------------------- --- ------------------------- -------------------------------
Owsley Brown II 54 Chairman of the Company since Cousin to Owsley Brown Frazier
July, 1995. Chief Executive Officer
of the company since July 1993.
President of the company from
July 1987 to July 1993.
Owsley Brown Frazier 61 Vice Chairman of the company Cousin to Owsley Brown II
since August 1983.
William M. Street 58 Vice Chairman of the company None
since July 1987.
-9-
Steven B. Ratoff 54 Executive Vice President and Chief None
Financial Officer of the company
since December 1994. Private
investor in a number of small
privately-held companies from
February 1992 to November 1994.
Senior Vice President and Chief
Financial Officer for Pharmaceutical
Group of Bristol-Myers Squibb from
January 1990 to January 1992.
John P. Bridendall 47 Senior Vice President and Director of None
Corporate Development since July 1987.
Russell C. Buzby 63 Senior Vice President and Executive None
Director of Human Resources and
Information Services since July 1987.
Michael B. Crutcher 53 Senior Vice President, General Counsel, None
and Secretary since May 1989.
Richard E. Stearns 46 President and Chief Executive Officer of None
Lenox, Incorporated (a subsidiary of
the company) since September 1995.
President of Lenox, Incorporated from
April 1992 to September 1995.
Lois A. Mateus 50 Senior Vice President of Corporate None
Communications and Corporate Services
since January 1988.
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 1997 Annual Report to Stockholders, which information
is incorporated into this report by reference.
Holders of record of Common Stock at April 30, 1997:
Class A Common Stock (Voting) 3,156
Class B Common Stock (Nonvoting) 5,054
The principal market for Brown-Forman common shares is the New York Stock
Exchange.
-10-
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 1997 Annual Report to
Stockholders, which information is incorporated into this report 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
"Management's Discussion and Analysis" appearing on pages 18 through 23 of the
1997 Annual Report to Stockholders, which information is incorporated into this
report by reference in response to Item 8.
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 U.S., our financial results are more exposed to foreign exchange
rate fluctuations and the health of foreign economies.
Beverage Risk Factors: The U.S. beverage alcohol business is highly
sensitive to tax increases; an increase in federal or state excise taxes
(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 Germany, the United Kingdom,
Japan, and Australia. 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 business anticipate a continued strengthening of our Lenox
business. These projections could be offset by factors such as poor
consumer response rates at Lenox Collections, weakened demand for fine
china, a soft retail environment at outlet malls, or further department
store consolidation.
-11-
Item 8. Financial Statements and Supplementary Date
For the information required by this item, refer to the Report of Management,
Consolidated Financial Statements, and Notes to Consolidated Financial
Statements appearing on pages 24 through 35 of the 1997 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 1997
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.
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 24, 1997, which information is incorporated into this report by reference:
(a) "Election of Directors" on page 4 through the third 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 24, 1997, which information is incorporated into this report by reference:
(a) "Executive Compensation" on pages 8 through 13; (b) "Retirement Plan
Descriptions" on pages 14 and 15; and (c) "Director Compensation" on page 15.
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 24, 1997, 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 17 of our definitive proxy
statement for the Annual Meeting of Stockholders to be held July 24, 1997, which
information is incorporated into this report by reference.
-12-
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 Pages(s)
------------- -------------
Incorporated by reference to our Annual
Report to Stockholders for the year
ended April 30, 1997:
Report of Management* -- 24
Consolidated Statement of Income for the
years ended April 30, 1997, 1996, and 1995* -- 25
Consolidated Balance Sheet at April 30, 1997, 1996, and 1995* -- 26 - 27
Consolidated Statement of Cash Flows for the
years ended April 30, 1997, 1996, and 1995* -- 28
Consolidated Statement of Stockholders' Equity
for the years ended April 30, 1997, 1996, and 1995* -- 29
Notes to Consolidated Financial Statements* -- 30 - 35
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, 1997, but only to the extent set forth in Items 1, 5, 6,
7, and 8 of this Annual Report on Form 10-K for the year ended April 30,
1997.
21 Subsidiaries of the Registrant.
23 Consent of Coopers & Lybrand L.L.P. independent accountants.
-13-
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 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 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 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 10-K filed on
July 19, 1994.
3(e) The by-laws of registrant, as amended on May 25, 1988, which is
incorporated into this report by reference to Brown-Forman
Corporation's 10-K filed on July 26, 1993.
4(a) Credit Agreement dated as of November 30, 1994, among Brown-Forman
Corporation and a group of United States and international banks, which
is incorporated into this report by reference to Brown-Forman
Corporation's 10-K filed on July 17, 1995.
4(b) Amendment No. 1 dated as of February 23, 1996, to the Credit Agreement
referenced in 4(a) above, which is incorporated into this report by
reference to Brown-Forman Corporation's 10-K filed on July 3, 1996.
4(c) 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) Description of compensation arrangement with W. L. Lyons Brown, Jr.,
which is incorporated into this report by reference to Brown-Forman
Corporation's 10-K filed on July 17, 1995.
10(b) 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(c) Brown-Forman Corporation Restricted Stock Plan which is incorporated
into this report by reference to Brown-Forman Corporation's 10-K filed
July 19, 1994.
10(d) Brown-Forman Corporation Supplemental Excess Retirement Plan, which is
incorporated into this report by reference to Brown-Forman
Corporation's 10-K filed on July 23, 1990.
-14-
10(e) Brown-Forman Corporation Stock Appreciation Rights Plan, which is
incorporated into this report by reference to Brown-Forman
Corporation's 10-K filed on July 23, 1990.
10(f) A description of the Brown-Forman Savings Plan 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(g) A description of the Brown-Forman Flexible Reimbursement Plan 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.
(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: May 28, 1997 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 28, 1997 as indicated:
/s/ BARRY D. BRAMLEY /s/ DONALD G. CALDER /s/ OWSLEY BROWN FRAZIER
- ------------------------- ---------------------- ------------------------
By: Barry D. Bramley By: Donald G. Calder By: Owsley Brown Frazier
Director Director Director, Vice Chairman
of the Board
/s/ RICHARD P. MAYER /s/ STEPHEN E. O'NEIL /s/ WILLIAM M. STREET
- ------------------------- ---------------------- ------------------------
By: Richard P. Mayer By: Stephen E. O'Neil By: William M. Street
Director Director Director, Vice Chairman
of the Board
/s/ JAMES S. WELCH /s/ OWSLEY BROWN II /s/ THOMAS P. BURNET
- ------------------------- ---------------------- ------------------------
By: James S. Welch By: Owsley Brown II By: Thomas P. Burnet
Director Director, Chairman (Principal Accounting
of the Board and Officer) Brown-Forman
Chief Executive Corporation
Officer
Senior Vice President
and Chief Financial
/s/ GEO. GARVIN BROWN III /s/ STEVEN B. RATOFF Officer Brown-Forman
- ------------------------- ---------------------- Beverages Worldwide
By: Geo. Garvin Brown III By: Steven B. Ratoff
Director Executive Vice President
and Chief Financial Officer
(Principal Financial 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, 1997, 1996, and 1995, and for the
years then ended, which financial statements are included on pages 25 through 35
of the 1997 Annual Report to Stockholders of Brown-Forman Corporation and
incorporated by reference herein. We have also audited the financial statement
schedule listed in the index on page 13 of this Form 10-K. 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 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, 1997, 1996, and 1995 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 schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
/s/ Coopers & Lybrand L.L.P.
Louisville, Kentucky
May 27, 1997
S-1
BROWN-FORMAN CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended April 30, 1997, 1996, and 1995
(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
----------- --------- ------------ ---------- ---------
1997
Allowance for Doubtful Accounts $13,206 $ 5,530 $ 8,516(1) $10,220
1996
Allowance for Doubtful Accounts $14,061 $ 9,386 $10,241(1) $13,206
1995
Allowance for Doubtful Accounts $12,006 $ 9,343 $ 7,288(1) $14,061
(1) Doubtful accounts written off, net of recoveries.
S-2