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, 2002
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, 2002 and 2001 3
Statement of Changes in Net Assets Available for Benefits
for the years ended December 31, 2002 and 2001 4
Notes to Financial Statements 5-9
Supplemental Schedules:
Schedule of Assets (Held at End of Year), December 31, 2002 10
Schedule of Reportable Transactions for the year ended
December 31, 2002 11
Signatures 12
Consent of Independent Accountants 13
|
Report of Independent Accountants
To the Employee Benefits Committee
Brown-Forman Corporation
Lenox 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 Lenox Savings Plan for Collectively Bargained Employees (the Plan) at December 31, 2002 and 2001, 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 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
April 25, 2003
|
Lenox Savings Plan for Collectively Bargained Employees Statements of Net Assets Available for Benefits December 31, 2002 and 2001
2002 2001
---------------------------------------------- ---------------------------------------------
Participant Nonparticipant Participant Nonparticipant
Directed Directed Total Directed Directed Total
----------- -------------- ----------- ----------- -------------- -----------
Investments, at fair value:
Mutual funds $ 2,310,739 -- $ 2,310,739 $ 2,575,695 -- $ 2,575,695
Investment contract and
money market portfolios 335,410 -- 335,410 270,617 -- 270,617
Brown-Forman Corporation
Class B common stock 25,128 -- 25,128 14,170 -- 14,170
----------- -------------- ----------- ----------- -------------- -----------
2,671,277 -- 2,671,277 2,860,482 -- 2,860,482
Employers' contributions receivable 20,074 -- 20,074 18,660 -- 18,660
Employees' contributions receivable 45,521 -- 45,521 46,804 -- 46,804
----------- -------------- ----------- ----------- -------------- -----------
Net assets available for benefits $ 2,736,872 -- $ 2,736,872 $ 2,925,946 -- $ 2,925,946
=========== ============== =========== =========== ============== ===========
|
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, 2002 and 2001
2002 2001
---------------------------------------------- ---------------------------------------------
Participant Nonparticipant Participant Nonparticipant
Directed Directed Total Directed Directed Total
----------- -------------- ----------- ----------- -------------- -----------
Additions:
Contributions:
Employer $ 77,529 -- $ 77,529 $ 72,644 -- $ 72,644
Employee 579,420 -- 579,420 586,384 -- 586,384
----------- -------------- ----------- ----------- ------------- -----------
659,949 -- 656,949 659,028 -- 659,028
Interest income 8,483 -- 8,483 10,600 -- 10,600
Dividend income 29,691 -- 29,691 24,644 -- 24,644
----------- -------------- ----------- ----------- -------------- -----------
Total additions 695,123 -- 695,123 694,272 -- 694,272
----------- -------------- ----------- ----------- -------------- -----------
Deductions:
Withdrawals by participants 244,100 -- 244,100 251,588 -- 251,588
Net depreciation in fair value 640,097 -- 640,097 492,749 -- 492,749
----------- -------------- ----------- ----------- -------------- -----------
Total deductions 884,197 -- 884,197 744,337 -- 744,337
Net decrease (189,074) -- (189,074) (50,065) -- (50,065)
Net assets available for benefits:
Beginning of year 2,925,946 -- 2,925,946 2,976,011 -- 2,976,011
----------- -------------- ----------- ----------- -------------- -----------
End of year $ 2,736,872 -- $ 2,736,872 $ 2,925,946 -- $ 2,925,946
=========== ============== =========== =========== ============== ===========
|
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 2002 calendar year, currently $11,000. 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.
The Company's matching contribution is equal to 25% of the participant's elective deferral for the first 4% of the participant's annual compensation. Effective January 1, 2002, the Company's matching contribution is equal to 25% of the first 5% of the participant's annual compensation (6% of the participant's annual compensation effective October 1, 2005). 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 on a monthly basis 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. Effective January 1,
2002, 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) $40,000, or (ii) 100% 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 $175 and $27 for 2002 and 2001,
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.
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 Sponsor, 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
--------------------------------------------------------------
2002 2001
---------------------------- ----------------------------
Number of Number of
Shares, Units Shares, Units
or Principal or Principal
Amount Fair Value Amount Fair Value
------------- ---------- ------------- ----------
PBHG Growth Fund 12,393 $ 175,726 10,323 $ 210,166
Janus Worldwide Fund 13,331 428,318 11,973 524,916
Fidelity Magellan Fund 5,159 407,386 4,379 456,400
Fidelity Equity-Income Fund 12,977 514,807 11,571 564,315
Fidelity Growth Company 9,721 344,334 8,132 432,782
Fidelity Asset Manager 20,648 284,936 16,578 256,954
Fidelity Retirement Money
Market Portfolio 192,219 192,219 179,918 179,918
Managed Income Portfolio 143,191 143,191 90,699 90,699
Brown-Forman Corporation Class B
Common Stock Fund 2,331 25,128 1,368 14,170
Other investments 12,865 155,232 10,277 130,162
---------- ----------
$ 2,671,277 $ 2,860,482
========== ==========
|
During 2002 and 2001, the Plan's investments, including investments bought, sold, and held during the year, appreciated (depreciated) in value as follows:
2002 2001
---------- ----------
Mutual funds $ (639,920) $ (492,115)
Brown-Forman Corporation
Class B common stock (177) (634)
---------- ----------
$ (640,097) $ (492,749)
========== ==========
|
4. Tax Status:
The Internal Revenue Service has determined, and informed the Company by a letter dated April 16, 2003, that the Plan and related trust are designed in accordance with the applicable sections of the Internal Revenue Code (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 at End of Year) December 31, 2002
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 $ 175,726
Janus Enterprise Fund Mutual fund, variable rate and maturity 33,284
Janus Worldwide Fund Mutual fund, variable rate and maturity 428,318
PIMCO Total Return Fund Mutual fund, variable rate and maturity 121,710
Fidelity Magellan Fund* Mutual fund, variable rate and maturity 407,386
Fidelity Equity-Income Fund* Mutual fund, variable rate and maturity 514,807
Fidelity Growth Company Fund* Mutual fund, variable rate and maturity 344,334
Fidelity Asset Manager* Mutual fund, variable rate and maturity 284,936
Fidelity Retirement Money Money market portfolio, variable rate
Market Portfolio* and maturity 192,219
Managed Income Portfolio* Investment contract portfolio, variable
rate and maturity 143,191
Spartan U.S. Equity Index
Fund* Mutual fund, variable rate and maturity 238
Brown-Forman Corporation* Class B common stock fund 25,128
-----------
$ 2,671,277
===========
*Party-in-interest to the Plan
|
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, 2002
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.
|
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 on behalf of the Plan Administrator by the undersigned thereunto duly authorized.
LENOX SAVINGS PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
BY:
/s/ Milton B. Gillis Milton B. Gillis Member, Employee Benefits Committee (Plan Administrator) |
Vice President and Director of
Compensation and Employee Benefits
Brown-Forman Corporation
June 24, 2003
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 April 25, 2003 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, 2002 and 2001 which appear in this Form 11-K.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Louisville, Kentucky June 24, 2003 |
EXHIBIT 99
CERTIFICATE OF PERIODIC FINANCIAL REPORT
I, Milton B. Gillis, Vice President and Director of Compensation and Employee Benefits of Brown-Forman Corporation, on behalf of the Brown-Forman Corporation Employee Benefits Committee which functions as the chief executive officer and chief financial officer of the Lenox Savings Plan for Collectively Bargained Employees (the "Plan") certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Annual Report on Form 11-K for the Plan for the fiscal year ended December 31, 2002 (the "Periodic Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and
(2) information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Plan.
This certificate is being furnished solely for purposes of Section 906 and is not being filed as part of the Periodic Report.
Dated: June 26, 2003
/s/ Milton B. Gillis
Milton B. Gillis
Member, Employee Benefits Committee
|
Vice President and Director of Compensation and Employee Benefits
Brown-Forman Corporation