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:
Lenox 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, 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
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Report of Independent Accountants
To the Employee Benefits Committee
Brown-Forman Corporation
Lenox Savings Plan for
Collectively Bargained Employees
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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 Lenox Savings Plan for Collectively Bargained Employees (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
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Lenox Savings Plan for Collectively Bargained Employees 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 $ 2,665,700 -- $ 2,665,700 $ 2,550,159 -- $ 2,550,159
Investment contract and
money market portfolios 211,916 -- 211,916 184,622 -- 184,622
Brown-Forman Corporation
Class B common stock 9,844 -- 9,844 5,990 -- 5,990
----------- -------------- ----------- ----------- -------------- -----------
2,887,460 -- 2,887,460 2,740,771 -- 2,740,771
Employers' contributions receivable 34,207 -- 34,207 17,968 -- 17,968
Employees' contributions receivable 54,344 -- 54,344 56,654 -- 56,654
----------- -------------- ----------- ----------- -------------- -----------
Net assets available for benefits $ 2,976,011 -- $ 2,976,011 $ 2,815,393 -- $ 2,815,393
=========== ============== =========== =========== ============== ===========
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The accompanying notes are an integral part of the financial statements.
Lenox Savings Plan for Collectively Bargained Employees Statement 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 $ 64,772 -- $ 64,772 $ 48,518 -- $ 48,518
Employee 607,300 -- 607,300 650,069 -- 650,069
----------- -------------- ----------- ----------- ------------- -----------
672,072 -- 672,072 698,587 -- 698,587
Interest income 11,763 -- 11,763 8,545 -- 8,545
Dividend income 26,889 -- 26,889 15,422 -- 15,422
Net appreciation in fair value -- -- -- 684,133 -- 684,133
----------- -------------- ----------- ----------- -------------- -----------
Total additions 710,724 -- 710,724 1,406,687 -- 1,406,687
----------- -------------- ----------- ----------- -------------- -----------
Deductions:
Withdrawals by particpants 282,571 -- 282,571 88,381 -- 88,381
Net depreciation in fair value 267,535 -- 267,535 -- -- --
----------- -------------- ----------- ----------- -------------- -----------
Total deductions 550,106 -- 550,106 88,381 -- 88,381
Net increase 160,618 -- 160,618 1,318,306 -- 1,318,306
Net assets available for benefits:
Beginning of year 2,815,393 -- 2,815,393 1,497,087 -- 1,497,087
----------- -------------- ----------- ----------- -------------- -----------
End of year $ 2,976,011 -- $ 2,976,011 $ 2,815,393 -- $ 2,815,393
=========== ============== =========== =========== ============== ===========
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The accompanying notes are an integral part of the financial statements.
Lenox Savings Plan for Collectively Bargained Employees
Notes to Financial Statements
1. Description of Plan:
The sponsor of the Lenox Savings Plan for Collectively Bargained Employees (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 union hourly employees of Lenox, Incorporated (the Company) and, all hourly employees of Gorham, Inc. who are members of the United Steelworkers of America, AFL-CIO, Local 16031. 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: 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 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 to the Plan until they meet the eligibility requirements to participate in the Plan.
For employees of the Company, effective March 1, 1997 to October 3, 1999, the company shall contribute annually an amount equal to 25% of the participant's elective deferral for the first 2% of the participant's annual compensation. Effective October 4, 1999 and thereafter, the Company shall contribute annually an amount equal to 25% of the participant's elective deferral for the first 4% of the participant's annual compensation. The Company does not intend to make matching contributions at this time for those participants who are members of the United Steelworkers of America, AFL-CIO, Local 16031.
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. There were no forfeited nonvested accounts during 2000 and 1999.
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.
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, a participant may also withdraw vested interest in the case of financial hardship under guidelines promulgated by the Internal Revenue Service.
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.
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
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2000 1999
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Number of Number of
Shares, Units Shares, Units
or Principal or Principal
Amount Fair Value Amount Fair Value
------------- ---------- ------------- ----------
PBHG Growth Fund 8,640 $ 268,712 6,863 $ 325,192
Janus Worldwide Fund 10,441 593,649 8,641 660,431
Fidelity Magellan Fund 3,758 448,276 3,234 441,898
Fidelity Equity-Income Fund 9,596 512,694 7,520 402,178
Fidelity Growth Company 7,136 509,728 5,476 461,608
Fidelity Asset Manager 13,350 224,544 10,519 193,343
Brown-Forman Corporation Class B
Common Stock Fund 894 9,844 629 5,990
Other investments 219,853 320,013 190,463 250,131
---------- ----------
$ 2,887,460 $ 2,740,771
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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 $ (268,938) $ 684,654
Brown-Forman Corporation
Class B common stock 1,403 (521)
---------- ----------
$ (267,535) $ 684,133
========== ==========
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4. Tax Status:
The Internal Revenue Service has determined, and informed the Company by a letter dated September 16, 1998, 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.
Lenox Savings Plan for Collectively Bargained Employees Plan #017 EIN #21-0498476 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 Value
---------------------------- ----------------------------------- -----------
PBHG Growth Fund Mutual fund, variable rate and maturity $ 268,712
Janus Enterprise Fund Mutual fund, variable rate and maturity 31,839
Janus Worldwide Fund Mutual fund, variable rate and maturity 593,649
PIMCO Total Return Fund Mutual fund, variable rate and maturity 76,258
Fidelity Magellan Fund* Mutual fund, variable rate and maturity 448,276
Fidelity Equity-Income Fund* Mutual fund, variable rate and maturity 512,694
Fidelity Growth Company Fund* Mutual fund, variable rate and maturity 509,728
Fidelity Asset Manager* Mutual fund, variable rate and maturity 224,544
Fidelity Retirement Money Money market portfolio, variable rate
Market Portfolio* and maturity 138,812
Managed Income Portfolio* Investment contract portfolio, variable
rate and maturity 73,104
Brown-Forman Corporation* Class B common stock fund 9,844
-----------
$ 2,887,460
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*Party-in-interest to the Plan
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Lenox Savings Plan for Collectively Bargained Employees Plan #017 EIN #21-0498476 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.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Lenox Savings Plan for Collectively Bargained Employees has duly caused this report to be signed by the undersigned thereunto duly authorized.
LENOX 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 25, 2001 |
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 Lenox Savings Plan for Collectively Bargained Employees 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 |