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, 2000
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:
Hartmann Employee Savings and Investment Plan
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, 2000 and 1999 3
Statement of Changes in Net Assets Available for Benefits
for the years ended December 31, 2000 and 1999 4
Notes to Financial Statements 5-9
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at End of Year,
December 31, 2000 10
Schedule of Reportable Transactions for the Year Ended
December 31, 2000 11
Signatures 12
Consent of Independent Accountants 13
Report of Independent Accountants
To the Employee Benefits Committee
Brown-Forman Corporation
Hartmann Employee
Savings and Investment Plan
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 Hartmann Employee Savings and Investment Plan (the Plan) at December 31,
2000 and 1999, 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 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 3, 2001
2
Hartmann Employee Savings and Investment Plan
Statements of Net Assets Available for Benefits
December 31, 2000 and 1999
2000 1999
---------------------------------------------- ---------------------------------------------
Participant Nonparticipant Participant Nonparticipant
Directed Directed Total Directed Directed Total
----------- -------------- ----------- ----------- -------------- -----------
Investments, at fair value:
Mutual funds $ 4,718,619 -- $ 4,718,619 $ 5,899,126 -- $ 5,899,126
Investment contract and
money market portfolios 2,539,988 -- 2,539,988 2,358,562 -- 2,358,562
Brown-Forman Corporation
Class B common stock 32,956 $ 377,902 410,858 32,306 $ 328,786 361,092
Loans to participants 289,757 -- 289,757 278,089 -- 278,089
----------- -------------- ----------- ----------- -------------- -----------
7,581,320 377,902 7,959,222 8,568,083 328,786 8,896,869
Employers' contributions receivable 51,630 -- 51,630 66,054 -- 66,054
Employees' contributions receivable 28,841 -- 28,841 41,694 -- 41,694
----------- -------------- ----------- ----------- -------------- -----------
Net assets available for benefits $ 7,661,791 $ 377,902 $ 8,039,693 $ 8,675,831 $ 328,786 $ 9,004,617
=========== ============== =========== =========== ============== ===========
The accompanying notes are an integral part of the financial statements.
3
Hartmann Employee Savings and Investment Plan
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2000 and 1999
2000 1999
---------------------------------------------- ---------------------------------------------
Participant Nonparticipant Participant Nonparticipant
Directed Directed Total Directed Directed Total
----------- -------------- ----------- ----------- -------------- -----------
Additions:
Contributions:
Employer $ 233,835 -- $ 233,835 $ 232,846 -- $ 232,846
Employee 529,417 -- 529,417 474,655 -- 474,655
----------- -------------- ----------- ----------- ------------- -----------
763,252 -- 763,252 707,501 -- 707,501
Interest income 163,586 -- 163,586 163,774 -- 163,774
Dividend income 26,819 $ 6,967 33,786 49,623 $ 7,186 56,809
Net appreciation in fair value 50,461 50,461 1,229,111 -- 1,229,111
Net transfers from Lenox,
Incorporated Employee Savings
and Investment Plan -- -- -- 38,601 -- 38,601
Net transfers from Lenox,
Incorporated Retail Savings
and Investment Plan -- -- -- 1,326 -- 1,326
Net transfers from Brown-Forman
Corporation Savings Plan -- -- -- 107,894 -- 107,894
----------- -------------- ----------- ----------- -------------- -----------
Total additions 953,657 57,428 1,011,085 2,297,830 7,186 2,305,016
----------- -------------- ----------- ----------- -------------- -----------
Deductions:
Withdrawals by particpants 794,693 8,312 803,005 564,815 38,461 603,276
Net depreciation in fair value 813,211 -- 813,211 -- 120,988 120,988
Net transfers from Brown-Forman
Corporation Savings Plan 359,793 -- 359,793 -- -- --
----------- -------------- ----------- ----------- -------------- -----------
Total deductions 1,967,697 8,312 1,976,009 564,815 159,449 724,264
----------- -------------- ----------- ----------- -------------- -----------
Net increase (decrease) (1,014,040) 49,116 (964,924) 1,733,015 (152,263) 1,580,752
Net assets available for benefits:
Beginning of year 8,675,831 328,786 9,004,617 6,942,816 481,049 7,423,865
----------- -------------- ----------- ----------- -------------- -----------
End of year $ 7,661,791 $377,902 $ 8,039,693 $ 8,675,831 $328,786 $ 9,004,617
=========== ============== =========== =========== ============== ===========
The accompanying notes are an integral part of the financial statements.
4
Hartmann Employee Savings and Investment Plan
Notes to Financial Statements
1. Description of Plan:
The sponsor of the Hartmann Employee Savings and Investment Plan
(the Plan), Brown-Forman Corporation (the Sponsor), 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 salaried employees of Hartmann Luggage Company (the
Company). An employee becomes eligible to participate in the Plan
after completion of one year of service. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
b. Contributions: Employees may contribute to the Plan an amount of not
less than 2% nor more than 15% of their annual compensation, not to
exceed the Section 402(g) (of the Internal Revenue Code of 1986)
limitation in effect for the calendar year, currently $10,500
($10,000 in 1999). New employees may transfer assets from their
former employers' qualified plans to the Plan, but cannot make any
further contributions until they meet the eligibility requirements to
participate in the Plan.
For nonretail employees, the Company's matching contribution is equal
to 75% of the participant's elective deferral for the first 5% of the
participant's annual compensation. For retail employees, the
Company's matching contribution is equal to 50% of the participant's
elective deferral for the first 2% of annual compensation and an
additional 25% of the remainder of the participant's elective deferral
up to 10% of annual compensation.
The Company also makes a Company Retirement (CORE) contribution to
each salaried employee of the retail division who is employed on the
last day of the plan year, except those employees at the plant
location in Lebanon, Tennessee, in an amount equal to 3% of the
employee's eligible compensation during the year.
5
Each participant's account is credited with the participant's
contribution and an allocation of (i) the Company's matching
contribution on a quarterly basis, and (ii) plan earnings on a daily
basis, and (iii) the CORE contribution on an annual 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 $3,070
and $5,640 for 2000 and 1999, 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. Paysop Fund: This nonparticipant directed fund consists of company
contributions of Class B nonvoting common stock of Brown-Forman
Corporation. Contributions for any plan year were limited to one-half
of one percent of the annual compensation of all employees covered by
the Plan; however, the Company is no longer contributing to this fund.
This fund will be eliminated when all stock allocated to participants
is withdrawn.
d. Vesting: Participants are immediately vested in their employee
contributions plus actual earnings thereon. An employee becomes 100%
vested in the CORE contribution after five years of service with the
Company. 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.
e. Withdrawals: Upon termination of service, a participant can elect to
transfer his vested interest in the participant directed portion of
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,
a participant may also withdraw vested interest of the participant
directed funds in the case of financial hardship under guidelines
promulgated by the Internal Revenue Service.
6
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.
Withdrawals of the Paysop Fund benefits can be made in cash or a
single payment of the related common stock. If payment in common stock
is elected, fractional shares are paid in cash.
In addition, a participant may request permission from the plan
administrator to borrow a portion of such participant's vested accrued
benefit under the Plan. Loans must bear a reasonable rate of
interest, be collateralized, and be repaid within five years.
Participants do not share in the earnings from the Plan's investments
to the extent of any outstanding loans, except that the interest paid
on such loans is allocated directly to the participant's account.
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.
Investments in securities traded on a national securities exchange are
valued at the last reported sales price on the last business day of
the period. Mutual funds are valued at their net asset value per
share as quoted by the National Association of Securities Dealers.
Participant loans are valued at cost which approximates fair value.
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
--------------------------------------------------------------
2000 1999
---------------------------- ----------------------------
Number of Number of
Shares, Units Shares, Units
or Principal or Principal
Amount Fair Value Amount Fair Value
------------- ---------- ------------- ----------
Mutual funds, investment contract
portfolio and stock fund:
Janus Enterprise Fund 13,968 $ 744,050 8,290 $ 635,578
Janus Worldwide Fund 6,651 378,153 9,370 716,094
Fidelity Magellan Fund 12,180 1,453,103 20,235 2,764,686
Fidelity Equity-Income Fund 17,180 917,932 13,696 732,470
Fidelity Growth Company 11,624 830,289 9,048 762,776
Managed Income Portfolio 2,231,859 2,231,859 2,033,361 2,033,361
Brown-Forman Corporation Class B
Common Stock Fund 2,994 32,956 3,394 32,306
Other investments 327,649 992,978 336,898 890,812
---------- ----------
7,581,320 8,568,083
Common stock:
Brown-Forman Corporation
Class B common stock* 34,323 377,902 34,536 328,786
---------- ----------
$ 7,959,222 $ 8,896,869
========== ==========
*Nonparticipant directed
During 2000 and 1999, the Plan's investments, including investments
bought, sold, and held during the year, appreciated (depreciated) in
value as follows:
2000 1999
---------- ----------
Mutual funds $ (811,577) $ 1,238,323
Brown-Forman Corporation
Class B Common Stock Fund (1,634) (9,212)
---------- ----------
(813,211) 1,229,111
Brown-Forman Corporation
Class B common stock 50,461 (120,988)
---------- ----------
$ (762,750) $ 1,108,123
========== ==========
8
4. Tax Status:
The Internal Revenue Service has determined, and informed the Company
by a letter dated June 10, 1999, 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.
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
Hartmann Employee Savings and Investment Plan
Plan #018 EIN #61-0143150
Schedule H, Line 4i --
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest, Current
Lessor or Similar Party Collateral, Par or Maturity Value Cost Value
---------------------------- ----------------------------------- -------- -----------
PBHG Growth Fund Mutual fund, variable rate and maturity -- $ 165,423
Janus Enterprise Fund Mutual fund, variable rate and maturity -- 744,050
Janus Worldwide Fund Mutual fund, variable rate and maturity -- 378,153
PIMCO Total Return Fund Mutual fund, variable rate and maturity -- 51,043
Fidelity Magellan Fund* Mutual fund, variable rate and maturity -- 1,453,103
Fidelity Equity-Income Fund* Mutual fund, variable rate and maturity -- 917,932
Fidelity Growth Company Fund* Mutual fund, variable rate and maturity -- 830,289
Fidelity Asset Manager* Mutual fund, variable rate and maturity -- 143,660
Fidelity Retirement Money Money market portfolio, variable rate
Market Portfolio* and maturity -- 308,129
Managed Income Portfolio* Investment contract portfolio, variable
rate and maturity -- 2,231,859
Spartan U.S. Equity Index
Fund* Mutual fund, variable rate and maturity -- 34,966
Brown-Forman Corporation* Class B common stock fund -- 32,956
Brown-Forman Corporation* Class B common stock $334,407 377,902
Participant loans* Loans, 8%-10% rates, variable maturity -- 289,757
-----------
$ 7,959,222
===========
*Party-in-interest to the Plan
10
Hartmann Employee Savings and Investment Plan
Plan #018 EIN #61-0143150
Schedule H, Line 4j --
Schedule of Reportable Transactions
For the Year Ended December 31, 2000
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
Hartmann Employee Savings and Investment Plan has duly caused this report to
be signed by the undersigned thereunto duly authorized.
HARTMANN EMPLOYEE SAVINGS AND INVESTMENT PLAN
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 25, 2001
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 3, 2001 relating to the financial statements and supplemental
schedules of the Hartmann Employee Savings and Investment Plan as of and for the
years ended December 31, 2000 and 1999 which appear in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Louisville, Kentucky
June 25, 2001
13