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:
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, 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
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, 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
Lenox 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 $ 2,575,695 -- $ 2,575,695 $ 2,665,700 -- $ 2,665,700
Investment contract and
money market portfolios 270,617 -- 270,617 211,916 -- 211,916
Brown-Forman Corporation
Class B common stock 14,170 -- 14,170 9,844 -- 9,844
----------- -------------- ----------- ----------- -------------- -----------
2,860,482 -- 2,860,482 2,887,460 -- 2,887,460
Employers' contributions receivable 18,660 -- 18,660 34,207 -- 34,207
Employees' contributions receivable 46,804 -- 46,804 54,344 -- 54,344
----------- -------------- ----------- ----------- -------------- -----------
Net assets available for benefits $ 2,925,946 -- $ 2,925,946 $ 2,976,011 -- $ 2,976,011
=========== ============== =========== =========== ============== ===========
3
Lenox 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 $ 72,644 -- $ 72,644 $ 64,772 -- $ 64,772
Employee 586,384 -- 586,384 607,300 -- 607,300
----------- -------------- ----------- ----------- ------------- -----------
659,028 -- 659,028 672,072 -- 672,072
Interest income 10,600 -- 10,600 11,763 -- 11,763
Dividend income 24,644 -- 24,644 26,889 -- 26,889
----------- -------------- ----------- ----------- -------------- -----------
Total additions 694,272 -- 694,272 710,724 -- 710,724
----------- -------------- ----------- ----------- -------------- -----------
Deductions:
Withdrawals by participants 251,588 -- 251,588 282,571 -- 282,571
Net depreciation in fair value 492,749 -- 492,749 267,535 -- 267,535
----------- -------------- ----------- ----------- -------------- -----------
Total deductions 744,337 -- 744,337 550,106 -- 550,106
Net (decrease) increase (50,065) -- (50,065) 160,618 -- 160,618
Net assets available for benefits:
Beginning of year 2,976,011 -- 2,976,011 2,815,393 -- 2,815,393
----------- -------------- ----------- ----------- -------------- -----------
End of year $ 2,925,946 -- $ 2,925,946 $ 2,976,011 -- $ 2,976,011
=========== ============== =========== =========== ============== ===========
4
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. 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 (5% of the participant's annual compensation
effective January 1, 2002 and 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.
5
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 $27 for
2001. There were no forfeited nonvested accounts during 2000.
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.
6
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
------------- ---------- ------------- ----------
PBHG Growth Fund 10,323 $ 210,166 8,640 $ 268,712
Janus Worldwide Fund 11,973 524,916 10,441 593,649
Fidelity Magellan Fund 4,379 456,400 3,758 448,276
Fidelity Equity-Income Fund 11,571 564,315 9,596 512,694
Fidelity Growth Company 8,132 432,782 7,136 509,728
Fidelity Asset Manager 16,578 256,954 13,350 224,544
Fidelity Retirement Money
Market Portfolio 179,918 179,918 138,812 138,812
Brown-Forman Corporation Class B
Common Stock Fund 1,368 14,170 894 9,844
Other investments 100,976 220,861 81,041 181,201
---------- ----------
$ 2,860,482 $ 2,887,460
========== ==========
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 $ (492,115) $ (268,938)
Brown-Forman Corporation
Class B common stock (634) 1,403
---------- ----------
$ (492,749) $ (267,535)
========== ==========
8
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.
9
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, 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 $ 210,166
Janus Enterprise Fund Mutual fund, variable rate and maturity 33,666
Janus Worldwide Fund Mutual fund, variable rate and maturity 524,916
PIMCO Total Return Fund Mutual fund, variable rate and maturity 96,496
Fidelity Magellan Fund* Mutual fund, variable rate and maturity 456,400
Fidelity Equity-Income Fund* Mutual fund, variable rate and maturity 564,315
Fidelity Growth Company Fund* Mutual fund, variable rate and maturity 432,782
Fidelity Asset Manager* Mutual fund, variable rate and maturity 256,954
Fidelity Retirement Money Money market portfolio, variable rate
Market Portfolio* and maturity 179,918
Managed Income Portfolio* Investment contract portfolio, variable
rate and maturity 90,699
Brown-Forman Corporation* Class B common stock fund 14,170
-----------
$ 2,860,482
===========
*Party-in-interest to the Plan
10
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, 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 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 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 Lenox 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