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, 2003
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 Corporation 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 Registered Public Accounting Firm 2
Financial Statements:
Statement of Net Assets Available for Benefits,
December 31, 2003 and 2002 3
Statement of Changes in Net Assets Available for Benefits
for the years ended December 31, 2003 and 2002 4
Notes to Financial Statements 5-9
Supplemental Schedule:
Schedule of Assets (Held at End of Year), December 31, 2003 10
Signatures 11
Consent of Independent Registered Public Accounting Firm 12
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of
Brown-Forman Corporation 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 Brown-Forman Corporation Savings Plan for Collectively Bargained
Employees (the Plan) at December 31, 2003 and 2002, 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 the
standards of the Public Company Accounting Oversight Board (United States).
Those standards 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 schedule of assets (held
at end of year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is 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. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
Louisville, Kentucky
May 25, 2004
2
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
Participant Directed
--------------------------------
2003 2002
----------- -----------
Investments, at fair value:
Mutual funds $ 4,142,746 $ 2,971,453
Money market portfolio 220,216 194,641
Common collective trust fund 307,567 244,184
Brown-Forman Corporation
Class B common stock 208,087 83,929
----------- -----------
4,878,616 3,494,207
Employers' contributions receivable 48,859 50,965
Employees' contributions receivable 46,274 51,311
----------- -----------
Net assets available for benefits $ 4,973,749 $ 3,596,483
=========== ===========
The accompanying notes are an integral part of the financial statements.
3
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Statement of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2003 and 2002
Participant Directed
--------------------------------
2003 2002
----------- -----------
Additions:
Contributions:
Employer $ 201,705 $ 208,130
Employee 607,942 647,984
----------- -----------
809,647 856,114
Interest income 13,882 14,200
Dividend income 43,776 34,861
Net appreciation (depreciation)
in fair value 832,550 (776,781)
----------- -----------
Total additions 1,699,855 128,394
----------- -----------
Deductions:
Withdrawals by participants 312,365 224,523
Administrative expenses 522 149
Net transfers to other plans 9,702 172
----------- -----------
Total deductions 322,589 224,844
Net increase (decrease) 1,377,266 (96,450)
Net assets available for benefits:
Beginning of year 3,596,483 3,692,933
----------- -----------
End of year $ 4,973,749 $ 3,596,483
=========== ===========
The accompanying notes are an integral part of the financial statements.
4
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Notes to Financial Statements
1. Description of Plan:
The sponsor of the Brown-Forman Corporation Savings Plan for Collectively
Bargained Employees (the Plan), Brown-Forman Corporation (the Company),
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 the Company at the
Louisville Production Operations and/or Early Times Distillery and/or
Bluegrass Cooperage Company. 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: Certain employees at the Louisville Production
Operations and/or Early Times Distillery may contribute to the Plan an
amount of not less than $10 nor more than $150 of their weekly
compensation. Those employees who are members of Local Union 89 at
the Louisville Production Operations and Early Times Distillery may
contribute to the Plan an amount of not less than $10 nor more than
$150 of their weekly compensation. Employees at the Bluegrass
Cooperage Company may contribute to the Plan an amount of not less
than 2% nor more than 15% of their annual compensation. Employee
contributions are not to exceed the Section 402(g) (of the Internal
Revenue Code of 1986) limitation for the 2003 calendar year, currently
$12,000. 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.
5
For certain employees at the Louisville Production Operations and/or
Early Times Distillery, the Company shall contribute quarterly an
amount equal to 50% of the participant's elective deferral for
deferral amounts up to an average of $40 per week for each week of
said quarter ($50 per week effective December 1, 2003). For employees
who are members of Local Union 89 at the Louisville Production
Operations and Early Times Distillery, the Company shall contribute
quarterly an amount equal to 50% of the participant's elective
deferral for deferral amounts up to an average of $40 per week for
each week of said quarter ($50 per week effective November 1, 2003).
For employees at the Bluegrass Cooperage Company, the Company's
matching contribution is equal to 50% of the participant's elective
deferral for the first 3% of the participant's annual compensation.
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) $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 $0 and
$374 for 2003 and 2002, 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.
6
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 Company, some
participants may also withdraw vested interest in the case of
financial hardship under guidelines promulgated by the Internal
Revenue Service. Participants' contributions shall be suspended for
six months after the receipt of a hardship distribution for
participants who are members of certain unions, as defined by the
Plan.
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: The Plan's investments are stated at fair
value. Quoted market prices are used to value investments. Shares of
mutual funds and common collective trust fund are valued at the net
asset value of shares held by the Plan at year end. The Brown-Forman
Corporation Stock Fund is comprised of Brown-Forman Corporation
Class B shares, which are valued at the quoted closing market price,
and a cash component.
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
d. Reclassifications: Certain financial statement amounts have been
reclassified in the prior year to conform with current year
presentations. These reclassifications had no effect on total net
assets available for benefits or the increase (decrease) in net assets
available for benefits.
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
--------------------------------------------------------------
2003 2002
---------------------------- ----------------------------
Number of Number of
Shares, Units Shares, Units
or Principal or Principal
Amount Fair Value Amount Fair Value
------------- ---------- ------------- ----------
Investments at fair value:
Janus Worldwide Fund 8,540 $ 337,665 7,746 $ 248,880
Fidelity Magellan Fund 21,951 2,145,533 20,372 1,608,538
Fidelity Equity-Income Fund 12,769 635,251 10,754 426,598
Fidelity Growth Company Fund 5,060 253,363 4,288 151,866
Fidelity Asset Manager 25,636 404,019 19,845 273,863
Fidelity Retirement
Money Market Portfolio 220,216 220,216 194,641 194,641
Managed Income Portfolio 307,567 307,567 244,184 244,184
Brown-Forman Corporation Class B
Common Stock Fund 13,592 208,087 7,786 83,929
Other investments 21,017 366,915 18,739 261,708
---------- ----------
$ 4,878,616 $ 3,494,207
========== ==========
During 2003 and 2002, the Plan's investments, including gains and
losses on investments bought and sold, as well as held during the year,
appreciated (depreciated) in value as follows:
2003 2002
--------- ---------
Mutual funds $ 787,813 $(777,151)
Brown-Forman Corporation
Class B common stock 44,737 370
--------- ----------
$ 832,550 $(776,781)
========= ==========
8
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). 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 Plan investments are shares of mutual funds managed by Fidelity
Management Trust Company (Fidelity). Fidelity is the trustee as defined
by the Plan and, therefore, these transactions qualify as party-in-
interest transactions.
Certain administrative costs incurred by the Plan are paid by the
Company. Administrative expenses of $522 and $149 in 2003 and 2002,
respectively, were allocated to participants' accounts.
7. Risks and Uncertainties:
The Plan invests in various investment securities. Investment securities
are exposed to various risks such as interest rate, market, and credit
risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values
of investment securities will occur in the near term and that such
changes could materially affect participants' account balances and the
amounts reported in the statement of net assets available for benefits.
9
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Plan #016 EIN #61-0143150
Schedule H, Line 4i --
Schedule of Assets (Held at End of Year)
December 31, 2003
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 $ 83,080
Janus Enterprise Fund Mutual fund, variable rate and maturity 106,476
Janus Worldwide Fund Mutual fund, variable rate and maturity 337,665
PIMCO Total Return Fund Mutual fund, variable rate and maturity 124,060
Fidelity Magellan Fund* Mutual fund, variable rate and maturity 2,145,533
Fidelity Equity-Income Fund* Mutual fund, variable rate and maturity 635,251
Fidelity Growth Company Fund* Mutual fund, variable rate and maturity 253,363
Fidelity Asset Manager* Mutual fund, variable rate and maturity 404,019
Fidelity Retirement Money Money market portfolio, variable rate
Market Portfolio* and maturity 220,216
Managed Income Portfolio* Common collective trust fund, variable
rate and maturity 307,567
Spartan U.S. Equity
Index Fund* Mutual fund, variable rate and maturity 53,299
Brown-Forman Corporation* Class B common stock fund 208,087
-----------
$ 4,878,616
===========
*Party-in-interest to the Plan
10
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Brown-Forman Corporation 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.
BROWN-FORMAN CORPORATION SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
BY:
/s/ James S. Welch, Jr.
James S. Welch, Jr.
Member, Employee Benefits Committee
(Plan Administrator)
Vice Chairman, Strategy and Human Resources
Brown-Forman Corporation
June 25, 2004
11
EXHIBIT
Consent of Independent Registered Public Accounting Firm
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 25, 2004 relating to the financial statements and supplemental
schedule of the Brown-Forman Corporation Savings Plan for Collectively
Bargained Employees as of and for the years ended December 31, 2003 and 2002
which appear in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Louisville, Kentucky
June 25, 2004
12