UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2001
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-123
A. Full Title of Plan:
Brown-Forman Corporation Savings Plan
for Collectively Bargained Employees
B. Name of Issuer of the Securities held Pursuant to the Plan and
the Address of its Principal Executive Office:
Brown-Forman Corporation
850 Dixie Highway
Louisville, Kentucky 40210
INDEX
Pages
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for Benefits,
December 31, 2001 and 2000 3
Statement of Changes in Net Assets Available for Benefits
for the years ended December 31, 2001 and 2000 4
Notes to Financial Statements 5-9
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at End of Year,
December 31, 2001 10
Schedule of Reportable Transactions for the Year Ended
December 31, 2001 11
Signatures 12
Consent of Independent Accountants 13
Report of Independent Accountants
To the Employee Benefits Committee
Brown-Forman Corporation
Brown-Forman Corporation Savings Plan
for Collectively Bargained Employees
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Brown-Forman Corporation Savings Plan for Collectively Bargained
Employees (the Plan) at December 31, 2001 and 2000, and the changes in net
assets available for benefits for the years then ended in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, 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 our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes at the end of year and of reportable transactions are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PricewaterhouseCoopers LLP
May 2, 2002
2
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
2001 2000
---------------------------------------------- ---------------------------------------------
Participant Nonparticipant Participant Nonparticipant
Directed Directed Total Directed Directed Total
----------- -------------- ----------- ----------- -------------- -----------
Investments, at fair value:
Mutual funds $ 3,201,705 -- $ 3,201,705 $ 3,039,317 -- $ 3,039,317
Investment contract and
money market portfolios 367,700 -- 367,700 301,252 -- 301,252
Brown-Forman Corporation
Class B common stock 24,471 -- 24,471 16,199 -- 16,199
----------- -------------- ----------- ----------- -------------- -----------
3,593,876 -- 3,593,876 3,356,768 -- 3,356,768
Employers' contributions receivable 50,769 -- 50,769 36,112 -- 36,112
Employees' contributions receivable 48,288 -- 48,288 64,140 -- 64,140
----------- -------------- ----------- ----------- -------------- -----------
Net assets available for benefits $ 3,692,933 -- $ 3,692,933 $ 3,457,020 -- $ 3,457,020
=========== ============== =========== =========== ============== ===========
3
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Statement of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2001 and 2000
2001 2000
---------------------------------------------- ---------------------------------------------
Participant Nonparticipant Participant Nonparticipant
Directed Directed Total Directed Directed Total
----------- -------------- ----------- ----------- -------------- -----------
Additions:
Contributions:
Employer $ 196,654 -- $ 196,654 $ 132,730 -- $ 132,730
Employee 705,162 -- 705,162 659,890 -- 659,890
----------- -------------- ----------- ----------- ------------- -----------
901,816 -- 901,816 792,620 -- 792,620
Interest income 15,551 -- 15,551 15,441 -- 15,441
Dividend income 25,412 -- 25,412 21,138 -- 21,138
----------- -------------- ----------- ----------- -------------- -----------
Total additions 942,779 -- 942,779 829,199 -- 829,199
----------- -------------- ----------- ----------- -------------- -----------
Deductions:
Withdrawals by participants 261,069 -- 261,069 139,412 -- 139,412
Net depreciation in fair value 436,438 -- 436,438 295,431 -- 295,431
Net transfers to other plans 9,359 -- 9,359
----------- -------------- ----------- ----------- -------------- -----------
Total deductions 706,866 -- 706,866 434,843 -- 434,843
Net increase 235,913 -- 235,913 394,356 -- 394,356
Net assets available for benefits:
Beginning of year 3,457,020 -- 3,457,020 3,062,664 -- 3,062,664
----------- -------------- ----------- ----------- -------------- -----------
End of year $ 3,692,933 -- $ 3,692,933 $ 3,457,020 -- $ 3,457,020
=========== ============== =========== =========== ============== ===========
4
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Notes to Financial Statements
1. Description of Plan:
The sponsor of the Brown-Forman Corporation Savings Plan for Collectively
Bargained Employees (the Plan), Brown-Forman Corporation (the Company),
is a diversified producer and marketer of fine quality consumer products
in domestic and international markets. The Sponsor's operations include
the production, importing, and marketing of wines and distilled spirits
and the manufacture and sale of luggage and, through the Lenox,
Incorporated division, the manufacture and sale of china, crystal and
silver.
The following brief description of the Plan is provided for general
information purposes only. Participants should refer to the plan
agreement for more complete information.
a. General: The Plan is a defined contribution plan covering
substantially all union hourly employees of the Company at the
Louisville Production Operations and/or Early Times Distillery and/or
Bluegrass Cooperage Company. An employee becomes eligible to
participate in the Plan after the completion of twelve consecutive
months of employment, provided the employee works a minimum of 1,000
hours within the twelve-month period. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
b. Contributions: Certain employees at the Louisville Production
Operations and/or Early Times Distillery may contribute to the Plan an
amount of not less than $10 nor more than $120 of their weekly
compensation (an amount of not less than $10 nor more than $150 of
their weekly compensation effective January 1, 2001). Effective
December 4, 2000, those employees who are members of Local Union 89 at
the Louisville Production Operations and Early Times Distillery may
contribute to the Plan an amount of not less than $10 nor more than
$150 of their weekly compensation. Employees at the Bluegrass
Cooperage Company may contribute to the Plan an amount of not less
than 2% nor more than 15% of their annual compensation. Employee
contributions are not to exceed the Section 402(g) (of the Internal
Revenue Code of 1986) limitation for the calendar year, currently
$10,500. New employees may transfer assets from their former
employers' qualified plans to the Plan, but cannot make any further
contributions to the Plan until they meet the eligibility requirements
to participate in the Plan.
5
For certain employees at the Louisville Production Operations and/or
Early Times Distillery, the Company shall contribute quarterly an
amount equal to 50% of the participant's elective deferral for
deferral amounts up to an average of $20 per week for each week of
said quarter ($40 per week effective January 1, 2001 and $50 per week
effective December 1, 2003). Effective December 4, 2000, for
employees who are members of Local Union 89 at the Louisville
Production Operations and Early Times Distillery, the Company shall
contribute quarterly an amount equal to 50% of the participant's
elective deferral for deferral amounts up to an average of $40 per
week for each week of said quarter ($50 per week effective
December 1, 2003).
For employees at the Bluegrass Cooperage Company, the Company's
matching contribution is equal to 25% of the participant's elective
deferral for the first 3% of the participant's annual compensation.
Effective October 1, 2001, the Company's matching contribution is
equal to 50% of the participant's elective deferral for the first 3%
of the participant's annual compensation.
Each participant's account is credited with the participant's
contribution and an allocation of (i) the Company's contribution on
a quarterly basis, and (ii) plan earnings on a daily basis.
Allocations are based on the participants' contributions and
compensation as defined in the Plan. The total annual contributions,
as defined by the Plan, credited to a participant's account in a plan
year may not exceed the lesser of (i) $30,000, or (ii) 25% of the
participant's compensation in the plan year. Additional maximum
limits exist if the employee participates in a qualified defined
benefit plan maintained by the Company. Forfeited balances of
terminated participants' nonvested accounts are used first to
reinstate previously forfeited account balances of re-employed
participants, if any, and the remaining amounts are used to reduce
future company contributions. The forfeited balances totaled $95 and
$63 for 2001 and 2000, respectively.
Participants can allocate contributions among various investment
options in 1% increments. The Plan currently offers ten mutual funds,
one investment contract portfolio, and the Brown-Forman Corporation
Class B common stock fund as investment options to participants.
c. Vesting: Participants are immediately vested in their employee
contributions plus actual earnings thereon. Vesting in the Company's
contribution is 25% per year of continuous service with the Company.
Participants will become 100% vested in their company contributions
account in case of death, normal retirement, or total and permanent
disability.
6
d. Withdrawals: Upon termination of service, a participant can elect to
transfer his vested interest in the Plan to the qualified plan of his
new employer, roll over his funds into an Individual Retirement
Account, or receive his vested interest in the Plan in a lump-sum
amount or in the form of installment payments over a period of time
not to exceed his life expectancy. If the vested account balance is
less than $5,000, a lump-sum distribution will be made. In the event
of death, the participant's beneficiary will receive the vested
interest in a lump-sum payment. Upon approval of the Employee
Benefits Committee, some participants may also withdraw vested
interest in the case of financial hardship under guidelines
promulgated by the Internal Revenue Service. Effective January 1,
2002, the participant's contribution shall be suspended for six
months after the receipt of a hardship distribution.
The distribution to a terminated participant is based on the market
value of his vested interest in the Plan on the valuation date
available immediately preceding the date of the benefit payment.
2. Summary of Significant Accounting Policies:
a. Basis of Accounting: The financial statements of the Plan are
prepared under the accrual method of accounting. Withdrawals by
participants are recorded when paid. Purchases and sales of
securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-
dividend date.
b. Valuation of Investments: Investment contract and money market
portfolios are valued at cost which approximates fair value. Mutual
funds are valued at their net asset value per share as quoted by the
National Association of Securities Dealers. The Brown-Forman
Corporation Stock Fund is comprised of Brown-Forman Corporation
Class B shares, which are valued at the quoted closing market price.
The Plan presents in the accompanying statements of changes in net
assets available for benefits the net appreciation or depreciation
in the fair value of its investments which consists of the realized
gains or losses and the unrealized appreciation or depreciation on
those investments.
c. Management Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits and disclosure of
contingent assets and liabilities at the dates of the financial
statements and the reported amounts of additions to and deductions
from net assets during the reporting periods. Actual results could
differ from those estimates.
7
3. Investments:
The Plan's investments are held by a custodian trust company. The
following table presents the fair value of investments. Investments
that represent 5% or more of the Plan's net assets are separately
identified.
December 31
--------------------------------------------------------------
2001 2000
---------------------------- ----------------------------
Number of Number of
Shares, Units Shares, Units
or Principal or Principal
Amount Fair Value Amount Fair Value
------------- ---------- ------------- ----------
Janus Worldwide Fund 6,551 $ 287,208 5,014 $ 285,108
Fidelity Magellan Fund 17,704 1,845,118 15,154 1,807,921
Fidelity Equity-Income Fund 9,079 442,790 7,257 387,763
Fidelity Growth Company Fund 3,627 193,053 2,503 178,770
Fidelity Asset Manager 16,628 257,734 14,841 249,617
Managed Income Portfolio 205,702 205,702 160,563 160,563
Brown-Forman Corporation Class B
Common Stock Fund 2,362 24,471 1,471 16,199
Other investments 170,591 337,800 144,677 270,827
---------- ----------
$ 3,593,876 $ 3,356,768
========== ==========
During 2001 and 2000, the Plan's investments, including investments
bought, sold, and held during the year, appreciated (depreciated) in
value as follows:
2001 2000
---------- ----------
Mutual funds $ (435,373) $ (297,122)
Brown-Forman Corporation
Class B common stock (1,065) 1,691
---------- ----------
$ (436,438) $ (295,431)
========== ==========
4. Tax Status:
The Internal Revenue Service has determined, and informed the Company
by a letter dated December 18, 1996, that the Plan and related trust are
designed in accordance with the applicable sections of the Internal
Revenue Code (IRC). The Plan has been amended since receiving the
determination letter. However, the Company believes that the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC.
8
5. Plan Termination:
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants will become 100% vested in their accounts.
6. Related Party Transactions:
Certain administrative costs incurred by the Plan are paid by the
Company.
9
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Plan #016 EIN #61-0143150
Schedule H, Line 4i --
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2001
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest, Current
Lessor or Similar Party Collateral, Par or Maturity Value Value
---------------------------- ----------------------------------- -----------
PBHG Growth Fund Mutual fund, variable rate and maturity $ 65,837
Janus Enterprise Fund Mutual fund, variable rate and maturity 64,225
Janus Worldwide Fund Mutual fund, variable rate and maturity 287,208
PIMCO Total Return Fund Mutual fund, variable rate and maturity 31,365
Fidelity Magellan Fund* Mutual fund, variable rate and maturity 1,845,118
Fidelity Equity-Income Fund* Mutual fund, variable rate and maturity 442,790
Fidelity Growth Company Fund* Mutual fund, variable rate and maturity 193,053
Fidelity Asset Manager* Mutual fund, variable rate and maturity 257,734
Fidelity Retirement Money Money market portfolio, variable rate
Market Portfolio* and maturity 161,998
Managed Income Portfolio* Investment contract portfolio, variable
rate and maturity 205,702
Spartan U.S. Equity
Index Fund* Mutual fund, variable rate and maturity 14,375
Brown-Forman Corporation* Class B common stock fund 24,471
-----------
$ 3,593,876
===========
*Party-in-interest to the Plan
10
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Plan #016 EIN #61-0143150
Schedule H, Line 4j --
Schedule of Reportable Transactions
For the Year Ended December 31, 2001
Expense Current Value
Purchase Selling Lease Incurred with Cost of of Asset on Net Gain
Identity of Party Involved Description of Asset Price Price Rental Transaction Asset Transaction Date (Loss)
-------------------------- -------------------- -------- ------- ------ ------------- ------- ---------------- --------
No reportable transactions.
11
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees has
duly caused this report to be signed by the undersigned thereunto duly
authorized.
BROWN-FORMAN CORPORATION SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
BY:
/s/ Phoebe A. Wood
Phoebe A. Wood
Executive Vice President and
Chief Financial Officer
(On behalf of the Principal and
as Principal Financial Officer)
June 24, 2002
12
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-74567) of Brown-Forman Corporation of our report
dated May 2, 2002 relating to the financial statements and supplemental
schedules of the Brown-Forman Corporation Savings Plan for Collectively
Bargained Employees as of and for the years ended December 31, 2001 and 2000
which appear in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Louisville, Kentucky
June 24, 2002
13