þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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|
SECURITIES EXCHANGE ACT OF 1934
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Delaware
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61-0143150
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(State or other jurisdiction of
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(IRS Employer
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incorporation or organization)
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Identification No.)
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850 Dixie Highway
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Louisville, Kentucky
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40210
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Class A Common Stock ($.15 par value, voting)
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56,571,774
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Class B Common Stock ($.15 par value, nonvoting)
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88,613,344
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Three Months Ended
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Nine Months Ended
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||||||
January 31,
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January 31,
|
||||||
2010
|
2011
|
2010
|
2011
|
||||
Net sales
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$861.7
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$962.4
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$2,492.5
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$2,613.0
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|||
Excise taxes
|
224.3
|
254.4
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585.5
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637.2
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|||
Cost of sales
|
226.5
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244.5
|
673.0
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674.7
|
|||
Gross profit
|
410.9
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463.5
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1,234.0
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1,301.1
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|||
Advertising expenses
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92.0
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96.8
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260.2
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266.7
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|||
Selling, general, and administrative expenses
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131.5
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142.3
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373.7
|
407.2
|
|||
Amortization expense
|
1.3
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1.3
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3.8
|
3.8
|
|||
Other expense (income), net
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12.2
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(2.4)
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4.8
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(9.7)
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|||
Operating income
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173.9
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225.5
|
591.5
|
633.1
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|||
Interest income
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0.5
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0.6
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1.9
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1.7
|
|||
Interest expense
|
7.6
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7.5
|
23.6
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20.9
|
|||
Income before income taxes
|
166.8
|
218.6
|
569.8
|
613.9
|
|||
Income taxes
|
58.9
|
77.9
|
193.3
|
207.8
|
|||
Net income
|
$107.9
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$140.7
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$376.5
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$406.1
|
|||
Earnings per share:
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|||||||
Basic
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$0.73
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$0.97
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$2.54
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$2.78
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|||
Diluted
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$0.73
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$0.96
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$2.53
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$2.77
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|||
Cash dividends per common share:
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|||||||
Declared
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$0.600
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$1.640
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$1.175
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$2.240
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|||
Paid
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$0.300
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$1.320
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$0.875
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$1.920
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|||
April 30,
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January 31,
|
||
2010
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2011
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||
Assets
|
|||
Cash and cash equivalents
|
$231.6
|
$278.6
|
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Accounts receivable, net
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418.0
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530.3
|
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Inventories:
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|||
Barreled whiskey
|
298.9
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311.4
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Finished goods
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142.1
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153.2
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Work in process
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156.5
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162.2
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Raw materials and supplies
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53.1
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50.2
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Total inventories
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650.6
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677.0
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Current deferred tax assets
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42.2
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33.6
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Other current assets
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184.1
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167.2
|
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Total current assets
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1,526.5
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1,686.7
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Property, plant and equipment, net
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467.8
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450.4
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Goodwill
|
666.5
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667.8
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Other intangible assets
|
669.6
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667.3
|
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Deferred tax assets
|
11.0
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11.5
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Other assets
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41.6
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39.2
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Total assets
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$3,383.0
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$3,522.9
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Liabilities
|
|||
Accounts payable and accrued expenses
|
$342.4
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$371.9
|
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Dividends payable
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--
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46.4
|
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Accrued income taxes
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3.7
|
8.2
|
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Current deferred tax liabilities
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9.1
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8.0
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Short-term borrowings
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187.5
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0.1
|
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Current portion of long-term debt
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2.9
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3.0
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Total current liabilities
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545.6
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437.6
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Long-term debt
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507.9
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756.7
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Deferred tax liabilities
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82.2
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153.2
|
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Accrued pension and other postretirement benefits
|
283.4
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235.3
|
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Other liabilities
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68.9
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66.4
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Total liabilities
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1,488.0
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1,649.2
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Commitments and contingencies
|
|||
Stockholders’ Equity
|
|||
Common stock:
|
|||
Class A, voting
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|||
(57,000,000 shares authorized; 56,964,000 shares issued)
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8.5
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8.5
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Class B, nonvoting
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|||
(100,000,000 shares authorized; 99,363,000 shares issued)
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14.9
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14.9
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Additional paid-in capital
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59.4
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57.1
|
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Retained earnings
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2,464.4
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2,544.6
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Accumulated other comprehensive loss, net of tax
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(176.3)
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(167.6)
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Treasury stock, at cost (9,364,000 and 11,142,000
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|||
shares at April 30 and January 31, respectively)
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(475.9)
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(583.8)
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Total stockholders’ equity
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1,895.0
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1,873.7
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Total liabilities and stockholders’ equity
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$3,383.0
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$3,522.9
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Nine Months Ended
|
|||
January 31,
|
|||
2010
|
2011
|
||
Cash flows from operating activities:
|
|||
Net income
|
$376.5
|
$406.1
|
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Adjustments to reconcile net income to
net cash provided by operations:
|
|||
Depreciation and amortization
|
43.8
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42.9
|
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Trademark impairment charge
|
11.6
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--
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Gain on sale of property, plant, and equipment
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--
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(1.5)
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Stock-based compensation expense
|
5.8
|
6.0
|
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Deferred income taxes
|
32.5
|
65.5
|
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Changes in assets and liabilities
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(45.7)
|
(119.5)
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Cash provided by operating activities
|
424.5
|
399.5
|
|
Cash flows from investing activities:
|
|||
Proceeds from sale of property, plant, and equipment
|
--
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12.1
|
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Additions to property, plant, and equipment
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(17.2)
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(26.5)
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Computer software expenditures
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(2.2)
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(2.4)
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Cash used for investing activities
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(19.4)
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(16.8)
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Cash flows from financing activities:
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|||
Net decrease in short-term borrowings
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(231.3)
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(187.3)
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Repayment of long-term debt
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(1.7)
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(2.1)
|
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Proceeds from long-term debt
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--
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248.4
|
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Debt issuance costs
|
--
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(1.8)
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Net payments related to exercise of stock options
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(3.8)
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(6.4)
|
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Excess tax benefits from stock options
|
3.0
|
8.6
|
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Acquisition of treasury stock
|
(157.5)
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(118.3)
|
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Dividends paid
|
(129.8)
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(279.5)
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Cash used for financing activities
|
(521.1)
|
(338.4)
|
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Effect of exchange rate changes on cash and cash equivalents
|
17.6
|
2.7
|
|
Net (decrease) increase in cash and cash equivalents
|
(98.4)
|
47.0
|
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Cash and cash equivalents, beginning of period
|
340.1
|
231.6
|
|
Cash and cash equivalents, end of period
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$241.7
|
$278.6
|
|
Three Months Ended
|
Nine Months Ended
|
||||||
January 31,
|
January 31,
|
||||||
(Dollars in millions, except per share amounts)
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2010
|
2011
|
2010
|
2011
|
|||
Basic and diluted net income
|
$107.9
|
$140.7
|
$376.5
|
$406.1
|
|||
Income allocated to participating
securities (restricted shares)
|
(0.1)
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(0.1)
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(0.5)
|
(0.4)
|
|||
Net income available to common stockholders
|
$107.8
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$140.6
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$376.0
|
$405.7
|
|||
Share data (in thousands):
|
|||||||
Basic average common shares outstanding
|
146,758
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145,061
|
148,162
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145,787
|
|||
Dilutive effect of stock options,
SSARs, RSUs, and DSUs
|
784
|
979
|
718
|
883
|
|||
Diluted average common shares outstanding
|
147,542
|
146,040
|
148,880
|
146,670
|
|||
Basic earnings per share
|
$0.73
|
$0.97
|
$2.54
|
$2.78
|
|||
Diluted earnings per share
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$0.73
|
$0.96
|
$2.53
|
$2.77
|
April 30,
|
January 31,
|
||
(Dollars in millions)
|
2010
|
2011
|
|
5.2% notes, due April 1, 2012
|
$250.2
|
$252.2
|
|
5.0% notes, due February 1, 2014
|
249.3
|
249.7
|
|
2.5% notes, due January 15, 2016
|
--
|
248.4
|
|
Other
|
11.3
|
9.4
|
|
510.8
|
759.7
|
||
Less current portion
|
2.9
|
3.0
|
|
$507.9
|
$756.7
|
Three Months Ended
|
Nine Months Ended
|
||||||
January 31,
|
January 31,
|
||||||
(Dollars in millions)
|
2010
|
2011
|
2010
|
2011
|
|||
Pension Benefits:
|
|||||||
Service cost
|
$2.7
|
$3.9
|
$8.1
|
$11.7
|
|||
Interest cost
|
8.1
|
8.3
|
24.3
|
25.0
|
|||
Expected return on plan assets
|
(8.6)
|
(9.1)
|
(25.7)
|
(27.2)
|
|||
Amortization of:
|
|||||||
Prior service cost
|
0.2
|
0.2
|
0.7
|
0.7
|
|||
Net actuarial loss
|
1.0
|
4.7
|
2.9
|
14.0
|
|||
Net expense
|
$3.4
|
$8.0
|
$10.3
|
$24.2
|
|||
Other Postretirement Benefits:
|
|||||||
Service cost
|
$0.2
|
$0.3
|
$0.7
|
$1.0
|
|||
Interest cost
|
0.9
|
0.8
|
2.6
|
2.4
|
|||
Amortization of net actuarial (gain) loss
|
--
|
--
|
(0.1)
|
0.1
|
|||
Net expense
|
$1.1
|
$1.1
|
$3.2
|
$3.5
|
Three Months Ended
|
Nine Months Ended
|
||||||
January 31,
|
January 31,
|
||||||
(Dollars in millions)
|
2010
|
2011
|
2010
|
2011
|
|||
Net income
|
$107.9
|
$140.7
|
$376.5
|
$406.1
|
|||
Other comprehensive income (loss), net of tax:
|
|||||||
Postretirement benefits adjustment
|
0.9
|
2.6
|
2.2
|
8.3
|
|||
Foreign currency translation adjustment
|
(4.6)
|
1.3
|
22.4
|
7.0
|
|||
Net gain (loss) on cash flow hedges
|
9.4
|
2.2
|
(8.7)
|
(6.6)
|
|||
5.7
|
6.1
|
15.9
|
8.7
|
||||
Comprehensive income
|
$113.6
|
$146.8
|
$392.4
|
$414.8
|
April 30,
|
January 31,
|
||
(Dollars in millions)
|
2010
|
2011
|
|
Postretirement benefits adjustment
|
$(190.5)
|
$(182.2)
|
|
Cumulative translation adjustment
|
10.8
|
17.8
|
|
Unrealized gain (loss) on cash flow hedge contracts
|
3.4
|
(3.2)
|
|
$(176.3)
|
$(167.6)
|
·
|
Level 1
–
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
·
|
Level 2
–
Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be derived from or corroborated by observable market data.
|
·
|
Level 3
–
Unobservable inputs that are supported by little or no market activity.
|
(Dollars in millions)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||
Assets:
|
|||||||
Commodity contracts
|
$5.8
|
--
|
--
|
$5.8
|
|||
Foreign currency contracts
|
--
|
$0.5
|
--
|
0.5
|
|||
Interest rate swap contracts
|
--
|
3.2
|
--
|
3.2
|
|||
Liabilities:
|
|||||||
Foreign currency contracts
|
--
|
7.4
|
--
|
7.4
|
Carrying
|
Fair
|
||
(Dollars in millions)
|
Amount
|
Value
|
|
Assets:
|
|||
Cash and cash equivalents
|
$278.6
|
$278.6
|
|
Commodity contracts
|
5.8
|
5.8
|
|
Foreign currency contracts
|
0.5
|
0.5
|
|
Interest rate swap contracts
|
3.2
|
3.2
|
|
Liabilities:
|
|||
Foreign currency contracts
|
7.4
|
7.4
|
|
Short-term borrowings
|
0.1
|
0.1
|
|
Current portion of long-term debt
|
3.0
|
3.0
|
|
Long-term debt
|
756.7
|
792.7
|
(Dollars in millions)
|
Classification
|
Fair value of derivatives in a
gain position
|
Fair value of derivatives in a
loss position
|
||
Designated as cash flow hedges:
|
|||||
Foreign currency contracts
|
Other current assets
|
$1.5
|
$(1.2)
|
||
Foreign currency contracts
|
Accrued expenses
|
0.6
|
(7.0)
|
||
Foreign currency contracts
|
Other liabilities
|
0.3
|
(1.6)
|
||
Designated as fair value hedges:
|
|||||
Interest rate swap contracts
|
Other current assets
|
0.8
|
--
|
||
Interest rate swap contracts
|
Other assets
|
2.4
|
--
|
||
Not designated as hedges:
|
|||||
Commodity contracts
|
Other current assets
|
5.9
|
(0.1)
|
||
Foreign currency contracts
|
Other current assets
|
0.4
|
(0.2)
|
||
Foreign currency contracts
|
Accrued expenses
|
0.4
|
(0.1)
|
·
|
continuing or additional pressure on economic conditions in major markets or political, financial, or equity market turmoil (and related credit and capital market instability and illiquidity); high unemployment; supplier, customer or consumer credit or other financial problems; inventory fluctuations at distributors, wholesalers, or retailers; bank failures or governmental nationalizations; etc.
|
·
|
successful development and implementation of effective business and brand strategies and innovations, including distribution, marketing, promotional activity, favorable trade and consumer reaction to our product line extensions, formulation, and packaging changes
|
·
|
competitors’ pricing actions (including price reductions, promotions, discounting, couponing or free goods), marketing, product introductions, or other competitive activities
|
·
|
prolonged continuation or acceleration of the declines in consumer confidence or spending, whether related to economic conditions (such as austerity measures or tax increases), wars, natural or other disasters, weather, pandemics, security concerns, terrorist attacks or other factors
|
·
|
changes in tax rates (including excise, sales, VAT, corporate, individual income, dividends, capital gains) or in related reserves, changes in tax rules (e.g., LIFO, foreign income deferral, U.S. manufacturing and other deductions) or accounting standards, tariffs, or other restrictions affecting beverage alcohol, and the unpredictability and suddenness with which they can occur
|
·
|
trade or consumer resistance to price increases in our products
|
·
|
tighter governmental restrictions on our ability to produce, import, sell, price, or market our products, including advertising and promotion; regulatory compliance costs
|
·
|
business disruption, decline or costs related to reductions in workforce or other cost-cutting measures
|
·
|
lower returns and discount rates related to pension assets, higher interest rates, or significant fluctuations in inflation rates; deflation
|
·
|
fluctuations in the U.S. dollar against foreign currencies, especially the euro, British pound, Australian dollar, or Polish zloty
|
·
|
changes in consumer behavior and our ability to anticipate and respond to them, including reduction of bar, restaurant, hotel or other on-premise business; shifts to discount store purchases or shifts away from premium-priced products; other price-sensitive consumer behavior; or reductions in travel
|
·
|
distribution arrangement and other route-to-consumer decisions or changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in implementation-related costs
|
·
|
adverse impacts resulting from our acquisitions, dispositions, joint ventures, business partnerships, or portfolio strategies
|
·
|
lower profits, due to factors such as fewer used barrel sales, lower production volumes (either for our own brands or for those of third parties), sales mix shift toward lower priced or lower margin skus, or cost increases in energy or raw materials, such as grapes, grain, agave, wood, glass, plastic, or closures
|
·
|
climate changes, agricultural uncertainties, environmental calamities, our suppliers’ financial hardships or other factors that affect the availability, price, or quality of grapes, agave, grain, glass, energy, closures, plastic, or wood
|
·
|
negative publicity related to our company, brands, personnel, operations, business performance or prospects
|
·
|
product counterfeiting, tampering, contamination, or recalls and resulting negative effects on our sales, brand equity, or corporate reputation
|
·
|
significant costs or other adverse developments stemming from litigation or governmental investigations of beverage alcohol industry business, trade, or marketing practices by us, our importers, distributors, or retailers
|
·
|
impairment in the recorded value of any assets, including receivables, inventory, fixed assets, goodwill or other intangibles
|
Three Months Ended
|
|||||
January 31,
|
|||||
2010
|
2011
|
Change
|
|||
Net sales
|
$861.7
|
$962.4
|
12%
|
||
Gross profit
|
410.9
|
463.5
|
13%
|
||
Advertising expenses
|
92.0
|
96.8
|
5%
|
||
Selling, general, and administrative expenses
|
131.5
|
142.3
|
8%
|
||
Amortization expense
|
1.3
|
1.3
|
|||
Other expense (income), net
|
12.2
|
(2.4)
|
|||
Operating income
|
173.9
|
225.5
|
30%
|
||
Interest expense, net
|
7.1
|
6.9
|
|||
Income before income taxes
|
166.8
|
218.6
|
31%
|
||
Income taxes
|
58.9
|
77.9
|
|||
Net income
|
107.9
|
140.7
|
30%
|
||
Gross margin
|
47.7%
|
48.2%
|
|||
Operating margin
|
20.2%
|
23.4%
|
|||
Effective tax rate
|
35.3%
|
35.6%
|
|||
Earnings per share:
|
|||||
Basic
|
$0.73
|
$0.97
|
32%
|
||
Diluted
|
0.73
|
0.96
|
32%
|
Change vs.
Prior Period
|
||
·
Underlying change in gross profit
|
7%
|
|
·
Estimated net change in distributor inventories
|
3%
|
|
·
Foreign exchange
|
3%
|
|
Reported change in gross profit
|
13%
|
Change vs.
Prior Period
|
||
·
Underlying change in operating income
|
11%
|
|
·
Absence of Don Eduardo brand name write-down
4
|
7%
|
|
·
Estimated net change in distributor inventories
|
7%
|
|
·
Foreign exchange
|
5%
|
|
Reported change in operating income
|
30%
|
Nine Months Ended
|
|||||
January 31,
|
|||||
2010
|
2011
|
Change
|
|||
Net sales
|
$2,492.5
|
$2,613.0
|
5%
|
||
Gross profit
|
1,234.0
|
1,301.1
|
5%
|
||
Advertising expenses
|
260.2
|
266.7
|
3%
|
||
Selling, general, and administrative expenses
|
373.7
|
407.2
|
9%
|
||
Amortization expense
|
3.8
|
3.8
|
|||
Other expense (income), net
|
4.8
|
(9.7)
|
|||
Operating income
|
591.5
|
633.1
|
7%
|
||
Interest expense, net
|
21.7
|
19.2
|
|||
Income before income taxes
|
569.8
|
613.9
|
8%
|
||
Income taxes
|
193.3
|
207.8
|
|||
Net income
|
376.5
|
406.1
|
8%
|
||
Gross margin
|
49.5%
|
49.8%
|
|||
Operating margin
|
23.7%
|
24.2%
|
|||
Effective tax rate
|
33.9%
|
33.8%
|
|||
Earnings per share:
|
|||||
Basic
|
$2.54
|
$2.78
|
10%
|
||
Diluted
|
2.53
|
2.77
|
10%
|
Change vs.
Prior Period
|
||
·
Underlying change in net sales
|
4%
|
|
·
Foreign exchange
|
1%
|
|
Reported change in net sales
|
5%
|
·
|
Jack Daniel’s Tennessee Whiskey net sales increased in the mid-single digits on both a reported and constant currency basis.
6
Global depletions improved 5%, growing 9% internationally and 1% in the U.S. The brand’s growth outside the U.S. was broad-based with notable gains throughout most of Europe, Latin America, Australia, India, and Travel Retail.
|
·
|
Jack Daniel’s RTDs registered double-digit growth in net sales on both a reported and constant currency basis as the brand continued to benefit from strong volumetric gains in Australia and Germany. Geographic expansion that began last year in the U.K. and Mexico, and further expansion into other markets this fiscal year, including Canada, Belgium, and some markets in Southern Europe, also contributed to the depletion and net sales growth for Jack Daniel’s RTDs.
|
·
|
Finlandia net sales declined in the low-single digits on a reported, but were up in the low-single-digits on a constant currency basis driven by an increase in the mix of volumes sold in higher margin markets. The brand’s depletions declined 2% compared to same period last fiscal year driven by the anticipated disruption related to a distribution change in Russia. In Poland, the brand’s largest market, depletions grew 4% for the first nine months of the year, after declining 10% last fiscal year.
|
·
|
Southern Comfort family of brands global net sales declined in the low-single digits through January on both a reported and constant currency basis driven by depletion declines for the parent brand in the brand’s largest market, the U.S. These declines were partially offset by the introduction of the Southern Comfort Lime line extension in this same market. We believe the performance for the parent brand continues to be adversely affected by increased competition from flavored whiskeys, flavored vodkas, and spiced rums, particularly those consumed in the more traditional shot occasion.
|
·
|
el Jimador experienced double-digit growth in depletions and net sales on both a reported and constant currency basis, fueled by double-digit depletion gains in the U.S., high single-digit growth in Mexico, and continued expansion into other international markets.
|
Change vs.
Prior Period
|
||
·
Underlying change in gross profit
|
4%
|
|
·
Foreign exchange
|
1%
|
|
Reported change in gross profit
|
5%
|
·
|
The absence of the write-down of the Don Eduardo brand name (approximately $12 million)
|
·
|
A weaker U.S. dollar (approximately $5 million); and
|
·
|
An estimated net change in distributor inventories (approximately $5 million)
|
Change vs.
Prior Period
|
||
·
Underlying change in operating income
|
4%
|
|
·
Absence of Don Eduardo brand name write-down
|
2%
|
|
·
Foreign exchange
|
1%
|
|
·
Estimated net change in distributor inventories
|
1%
|
|
·
Expenses associated with changes in route-to-market
7
|
(1%)
|
|
Reported change in operating income
|
7%
|
Period
|
Total Number of
Shares Purchased
|
Average Price Paid
per Share
|
Total Number of Shares Purchased
as Part of Publicly Announced
Plans or Programs
|
Approximate Dollar
Value of Shares that
May Yet Be Purchased Under the Plans or Programs
|
November 1, 2010 – November 30, 2010
|
192,631
|
$60.86
|
192,631
|
--
|
December 1, 2010 – December 31, 2010
|
--
|
--
|
--
|
--
|
January 1, 2011 – January 31, 2011
|
--
|
--
|
--
|
--
|
Total
|
192,631
|
$60.86
|
192,631
|
BROWN-FORMAN CORPORATION
|
|||
(Registrant)
|
|||
Date: March 9, 2011
|
By:
|
/s/Donald C. Berg | |
Donald C. Berg
|
|||
Executive Vice President
and Chief Financial Officer
|
|||
(On behalf of the Registrant and
as Principal Financial Officer)
|
BROWN-FORMAN CORPORATION | |||
|
By:
|
/s/ Cheryl Beckman | |
Cheryl Beckman | |||
Officer | |||
1.
|
I have reviewed this Quarterly report on Form 10-Q of Brown-Forman Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: March 9, 2011
|
By:
|
Paul C. Varga | |
Paul C. Varga
|
|||
Chief Executive Officer
|
|||
1.
|
I have reviewed this Quarterly report on Form 10-Q of Brown-Forman Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: March 9, 2011
|
By:
|
/s/ Donald C. Berg | |
Donald C. Berg
|
|||
Chief Financial Officer
|
|||
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: March 9, 2011
|
|||
By:
|
/s/ Paul C. Varga | ||
Paul C. Varga
|
|||
Chairman and Chief Executive Officer
|
|||
By:
|
/s/ Donald C. Berg | ||
Donald C. Berg
|
|||
Executive Vice President and Chief Financial Officer
|
|||