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 Winery Operations Savings 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, 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 5-8
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at End of Year,
December 31, 2001 9
Schedule of Reportable Transactions for the Year Ended
December 31, 2001 10
Signatures 11
Consent of Independent Accountants 12
Report of Independent Accountants
To the Employee Benefits Committee
Brown-Forman Corporation
Brown-Forman Winery Operations Savings 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 Brown-Forman Winery Operations Savings Plan (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 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 Winery Operations Savings Plan
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 $ 7,508,253 -- $ 7,508,253 $ 8,156,564 -- $ 8,156,564
Investment contract and
money market portfolios 4,022,704 -- 4,022,704 3,478,244 -- 3,478,244
Brown-Forman Corporation
Class B common stock 153,704 -- 153,704 139,156 -- 139,156
----------- -------------- ----------- ----------- -------------- -----------
11,684,661 -- 11,684,661 11,773,964 -- 11,773,964
Profit sharing contribution
receivable 380,000 -- 380,000 360,000 -- 360,000
Employers' contributions receivable 14,085 -- 14,085 17,451 -- 17,451
Employees' contributions receivable 44,121 -- 44,121 53,615 -- 53,615
----------- -------------- ----------- ----------- -------------- -----------
Net assets available for benefits $12,122,867 -- $12,122,867 $12,205,030 -- $12,205,030
=========== ============== =========== =========== ============== ===========
3
Brown-Forman Winery Operations Savings Plan
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:
Profit sharing $ 380,000 -- $ 380,000 $ 367,981 -- $ 367,981
Employer 184,062 -- 184,062 172,001 -- 172,001
Employee 613,979 -- 613,979 554,670 -- 554,670
----------- -------------- ----------- ----------- ------------- -----------
1,178,041 -- 1,178,041 1,094,652 -- 1,094,652
Interest income 188,220 -- 188,220 166,313 -- 166,313
Dividend income 90,655 -- 90,655 75,939 -- 75,939
Net transfers from other plans 11,531 -- 11,531 1,847,933 -- 1,847,933
----------- -------------- ----------- ----------- -------------- -----------
Total additions 1,468,447 -- 1,468,447 3,184,837 -- 3,184,837
----------- -------------- ----------- ----------- -------------- -----------
Deductions:
Withdrawals by participants 343,921 -- 343,921 924,588 -- 924,588
Net depreciation in fair value 1,206,689 -- 1,206,689 772,977 -- 772,977
Net transfers to other plans -- -- -- 7,090 -- 7,090
----------- -------------- ----------- ----------- -------------- -----------
Total deductions 1,550,610 -- 1,550,610 1,704,655 -- 1,704,655
Net increase (decrease) (82,163) -- (82,163) 1,480,182 -- 1,480,182
Net assets available for benefits:
Beginning of year 12,205,030 -- 12,205,030 10,724,848 -- 10,724,848
----------- -------------- ----------- ----------- -------------- -----------
End of year $12,122,867 -- $12,122,867 $12,205,030 -- $12,205,030
=========== ============== =========== =========== ============== ===========
4
Brown-Forman Winery Operations Savings Plan
Notes to Financial Statements
1. Description of Plan:
The sponsor of the Brown-Forman Winery Operations Savings 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 all eligible
employees of Fetzer Vineyards, all eligible employees of Jekel
Vineyards, and all eligible employees of Sonoma Cutrer Vineyards
(collectively, the Companies) who are not members of a collective
bargaining unit. On June 5, 2000, the Sonoma Cutrer Vineyards Plan
was terminated and assets totaling $1,847,933 were transferred to the
Plan. An employee becomes eligible to participate in the Plan
following attainment of age 21 and the completion of twelve
consecutive months of employment, provided the employee works a
minimum of 1,000 hours within the twelve-month period. Effective
January 1, 2002, an employee becomes eligible to participate in the
Plan on the employment commencement date. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
b. Contributions: Non-highly compensated employees may contribute to the
Plan an amount of not less than 1% 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. 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.
Effective January 1, 2002, non-highly compensated employees may
contribute to the Plan between 1% and 50% of their annual
compensation.
The Companies' matching contribution is equal to 50% of the
participant's elective contribution up to 5% of the participant's
annual compensation. The Companies may also make a profit sharing
contribution to the Plan, as determined by the Companies.
Participants can no longer make voluntary contributions to the profit
sharing portion of the Plan.
Each participant's account is credited with the participant's
contribution and an allocation of (i) the Companies's matching
contribution on a monthly basis, (ii) plan earnings on a daily basis,
and (iii) the Companies' profit sharing contribution and forfeited
balances of terminated participants' nonvested accounts on an annual
basis. 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.
5
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 added to
the Companies' contribution and allocated to eligible participants as
defined by the plan agreement. The forfeited balances totaled $24,395
and $29,311 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 Companies'
contributions and earnings thereon 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.
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 or in the form of an installment
payment. Upon approval of the Employee Benefits Committee, a
participant 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.
Effective January 1, 2002, a participant may request permission from
the plan administrator to borrow a portion of such participant's
vested accrued benefit under the Plan. Loans shall be limited to the
lesser of $50,000 or 50% of the vested account balance. 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.
6
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.
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 13,852 $ 607,279 15,499 $ 881,257
PIMCO Total Return Fund 57,742 603,981 10,014 104,049
Fidelity Magellan Fund 19,661 2,049,044 18,799 2,242,748
Fidelity Equity-Income Fund 51,952 2,533,720 49,592 2,649,699
Fidelity Growth Company 17,358 923,803 17,852 1,275,177
Fidelity Retirement
Money Market Portfolio 1,103,895 1,103,895 1,212,508 1,212,508
Managed Income Portfolio 2,918,809 2,918,809 2,265,736 2,265,736
Brown-Forman Corporation Class B
Common Stock Fund 14,836 153,704 12,639 139,156
Other investments 42,388 790,426 40,467 1,003,634
---------- ----------
$11,684,661 $11,773,964
========== ==========
7
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 $(1,212,443) $ (808,811)
Brown-Forman Corporation
Class B common stock 5,754 35,834
---------- ----------
$(1,206,689) $ (772,977)
========== ==========
4. Tax Status:
The Internal Revenue Service has determined, and informed the Companies
by a letter dated June 8, 1995, 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 Companies believe that the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC.
5. Plan Termination:
Although they have not expressed any intent to do so, the Companies have
the right under the Plan to discontinue their 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
Sponsor. Effective January 1, 2002, general administration expenses of
the third-party recordkeeper and the administration fee for processing
loans will be allocated to the participants' accounts.
8
Brown-Forman Winery Operations Savings Plan
Plan #001 EIN #94-2458321
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 $ 184,503
Janus Enterprise Fund Mutual fund, variable rate and maturity 152,063
Janus Worldwide Fund Mutual fund, variable rate and maturity 607,279
PIMCO Total Return Fund Mutual fund, variable rate and maturity 603,981
Fidelity Magellan Fund* Mutual fund, variable rate and maturity 2,049,044
Fidelity Equity-Income Fund* Mutual fund, variable rate and maturity 2,533,720
Fidelity Growth Company Fund* Mutual fund, variable rate and maturity 923,803
Fidelity Asset Manager* Mutual fund, variable rate and maturity 436,120
Fidelity Retirement Money Money market portfolio, variable rate
Market Portfolio* and maturity 1,103,895
Managed Income Portfolio* Investment contract portfolio, variable
rate and maturity 2,918,809
Spartan U.S. Equity Index
Fund* Mutual fund, variable rate and maturity 17,740
Brown-Forman Corporation* Class B common stock fund 153,704
-----------
$11,684,661
===========
*Party-in-interest to the Plan
9
Brown-Forman Winery Operations Savings Plan
Plan #001 EIN #94-2458321
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.
10
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Brown-Forman Winery Operations Savings Plan has duly caused this report to
be signed by the undersigned thereunto duly authorized.
BROWN-FORMAN WINERY OPERATIONS SAVINGS 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 24, 2002
11
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 Winery Operations Savings Plan 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
12