þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|
|
SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
61-0143150
|
(State or other jurisdiction of
|
(IRS Employer
|
incorporation or organization)
|
Identification No.)
|
850 Dixie Highway
|
|
Louisville, Kentucky
|
40210
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
Class A Common Stock ($.15 par value, voting)
|
84,445,591
|
|
Class B Common Stock ($.15 par value, nonvoting)
|
128,855,502
|
Three Months Ended
|
|||
July 31,
|
|||
2011
|
2012
|
||
Net sales
|
$840.3
|
$878.1
|
|
Excise taxes
|
202.5
|
212.3
|
|
Cost of sales
|
217.5
|
201.7
|
|
Gross profit
|
420.3
|
464.1
|
|
Advertising expenses
|
90.8
|
92.1
|
|
Selling, general, and administrative expenses
|
139.0
|
148.5
|
|
Amortization expense
|
1.3
|
--
|
|
Other (income) expense, net
|
3.3
|
1.8
|
|
Operating income
|
185.9
|
221.7
|
|
Interest income
|
0.8
|
0.6
|
|
Interest expense
|
7.9
|
5.2
|
|
Income before income taxes
|
178.8
|
217.1
|
|
Income taxes
|
60.7
|
69.6
|
|
Net income
|
$118.1
|
$147.5
|
|
Earnings per share:
|
|||
Basic
|
$0.54
|
$0.69
|
|
Diluted
|
$0.54
|
$0.69
|
|
Cash dividends per common share:
|
|||
Declared
|
$0.427
|
$0.467
|
|
Paid
|
$0.213
|
$0.233
|
|
Three Months Ended
|
|||
July 31,
|
|||
2011
|
2012
|
||
Net income
|
$118.1
|
$147.5
|
|
Other comprehensive income (loss), net of tax:
|
|||
Foreign currency translation adjustment
|
(9.3)
|
(13.3)
|
|
Postretirement benefits adjustment
|
3.3
|
4.5
|
|
Net gain on cash flow hedges
|
4.0
|
7.5
|
|
Net other comprehensive loss
|
(2.0)
|
(1.3)
|
|
Comprehensive income
|
$116.1
|
$146.2
|
|
April 30,
|
July 31,
|
||
2012
|
2012
|
||
Assets
|
|||
Cash and cash equivalents
|
$338.3
|
$361.5
|
|
Accounts receivable, less allowance for doubtful accounts of
$9.1 and $9.2 at April 30 and July 31, respectively
|
475.3
|
524.9
|
|
Inventories:
|
|||
Barreled whiskey
|
387.9
|
400.4
|
|
Finished goods
|
159.4
|
188.6
|
|
Work in process
|
114.5
|
117.6
|
|
Raw materials and supplies
|
50.3
|
57.8
|
|
Total inventories
|
712.1
|
764.4
|
|
Current deferred tax assets
|
36.3
|
21.2
|
|
Other current assets
|
187.3
|
177.5
|
|
Total current assets
|
1,749.3
|
1,849.5
|
|
Property, plant and equipment, net
|
398.7
|
404.6
|
|
Goodwill
|
617.2
|
612.1
|
|
Other intangible assets
|
668.3
|
664.8
|
|
Deferred tax assets
|
5.6
|
10.4
|
|
Other assets
|
38.3
|
41.6
|
|
Total assets
|
$3,477.4
|
$3,583.0
|
|
Liabilities
|
|||
Accounts payable and accrued expenses
|
$385.7
|
$375.7
|
|
Dividends payable
|
--
|
49.8
|
|
Accrued income taxes
|
9.9
|
35.5
|
|
Current deferred tax liabilities
|
0.8
|
6.1
|
|
Short-term borrowings
|
4.3
|
6.5
|
|
Current portion of long-term debt
|
2.7
|
2.7
|
|
Total current liabilities
|
403.4
|
476.3
|
|
Long-term debt
|
502.8
|
502.1
|
|
Deferred tax liabilities
|
157.9
|
172.6
|
|
Accrued pension and other postretirement benefits
|
278.1
|
256.6
|
|
Other liabilities
|
65.8
|
53.4
|
|
Total liabilities
|
1,408.0
|
1,461.0
|
|
Commitments and contingencies
|
|||
Stockholders’ Equity
|
|||
Common stock (see Note 11):
|
|||
Class A, voting
|
8.5
|
12.8
|
|
Class B, nonvoting
|
14.9
|
21.3
|
|
Additional paid-in capital
|
49.3
|
59.3
|
|
Retained earnings
|
3,031.5
|
3,057.0
|
|
Accumulated other comprehensive (loss) income, net of tax:
|
|||
Cumulative translation adjustment
|
(6.9)
|
(20.2)
|
|
Postretirement benefits adjustment
|
(219.9)
|
(215.4)
|
|
Unrealized (loss) gain on cash flow hedges
|
(3.4)
|
4.1
|
|
Treasury stock, at cost (14,253,000 and 14,014,000
|
|||
shares at April 30 and July 31, respectively)
|
(804.6)
|
(796.9)
|
|
Total stockholders’ equity
|
2,069.4
|
2,122.0
|
|
Total liabilities and stockholders’ equity
|
$3,477.4
|
$3,583.0
|
Three Months Ended
|
|||
July 31,
|
|||
2011
|
2012
|
||
Cash flows from operating activities:
|
|||
Net income
|
$118.1
|
$147.5
|
|
Adjustments to reconcile net income to
net cash provided by operations:
|
|||
Depreciation and amortization
|
13.0
|
11.5
|
|
Stock-based compensation expense
|
2.2
|
2.4
|
|
Deferred income taxes
|
(2.8)
|
28.4
|
|
Changes in assets and liabilities
|
(66.5)
|
(102.2)
|
|
Cash provided by operating activities
|
64.0
|
87.6
|
|
Cash flows from investing activities:
|
|||
Additions to property, plant, and equipment
|
(6.2)
|
(17.4)
|
|
Acquisition of brand names and trademarks
|
(7.0)
|
--
|
|
Computer software expenditures
|
(0.5)
|
(0.1)
|
|
Cash used for investing activities
|
(13.7)
|
(17.5)
|
|
Cash flows from financing activities:
|
|||
Net increase in short-term borrowings
|
1.9
|
2.2
|
|
Repayment of long-term debt
|
(0.8)
|
(0.6)
|
|
Net payments related to exercise of stock-based awards
|
(1.8)
|
(4.0)
|
|
Excess tax benefits from stock-based awards
|
4.4
|
7.6
|
|
Acquisition of treasury stock
|
(18.4)
|
--
|
|
Dividends paid
|
(46.4)
|
(49.8)
|
|
Cash used for financing activities
|
(61.1)
|
(44.6)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(3.8)
|
(2.3)
|
|
Net (decrease) increase in cash and cash equivalents
|
(14.6)
|
23.2
|
|
Cash and cash equivalents, beginning of period
|
567.1
|
338.3
|
|
Cash and cash equivalents, end of period
|
$552.5
|
$361.5
|
|
Three Months Ended
|
|||
July 31
|
|||
(Dollars in millions, except per share amounts)
|
2011
|
2012
|
|
Basic and diluted net income
|
$118.1
|
$147.5
|
|
Income allocated to participating securities
|
--
|
(0.1)
|
|
Net income available to common stockholders
|
$118.1
|
$147.4
|
|
Share data (in thousands):
|
|||
Basic average common shares outstanding
|
217,242
|
213,168
|
|
Dilutive effect of stock-based awards
|
1,559
|
1,630
|
|
Diluted average common shares outstanding
|
218,801
|
214,798
|
|
Basic earnings per share
|
$0.54
|
$0.69
|
|
Diluted earnings per share
|
$0.54
|
$0.69
|
Three Months Ended
|
|||
July 31
|
|||
(Dollars in millions)
|
2011
|
2012
|
|
Pension Benefits
:
|
|||
Service cost
|
$4.0
|
$4.9
|
|
Interest cost
|
8.5
|
8.8
|
|
Expected return on plan assets
|
(10.1)
|
(10.2)
|
|
Amortization of:
|
|||
Prior service cost
|
0.2
|
0.2
|
|
Net actuarial loss
|
4.9
|
7.0
|
|
Net expense
|
$7.5
|
$10.7
|
|
Other Postretirement Benefits
:
|
|||
Service cost
|
$0.4
|
$0.4
|
|
Interest cost
|
0.8
|
0.7
|
|
Amortization of:
|
|||
Prior service cost
|
0.1
|
0.2
|
|
Net expense
|
$1.3
|
$1.3
|
·
|
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:
|
|||||||
Currency derivatives
|
--
|
$8.0
|
--
|
$8.0
|
|||
Interest rate swaps
|
--
|
2.2
|
--
|
2.2
|
|||
Liabilities:
|
|||||||
Currency derivatives
|
--
|
4.7
|
--
|
4.7
|
|||
Short-term borrowings
|
--
|
6.5
|
--
|
6.5
|
|||
Current portion of long-term debt
|
--
|
2.7
|
--
|
2.7
|
|||
Long-term debt
|
--
|
529.6
|
--
|
529.6
|
Carrying
|
Fair
|
||
(Dollars in millions)
|
Amount
|
Value
|
|
Assets:
|
|||
Cash and cash equivalents
|
$361.5
|
$361.5
|
|
Currency derivatives
|
8.0
|
8.0
|
|
Interest rate swaps
|
2.2
|
2.2
|
|
Liabilities:
|
|||
Currency derivatives
|
4.7
|
4.7
|
|
Short-term borrowings
|
6.5
|
6.5
|
|
Current portion of long-term debt
|
2.7
|
2.7
|
|
Long-term debt
|
502.1
|
529.6
|
(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:
|
|||||
Currency derivatives
|
Other current assets
|
$9.3
|
$(3.3)
|
||
Currency derivatives
|
Other assets
|
2.3
|
(0.3)
|
||
Currency derivatives
|
Accrued expenses
|
2.4
|
(2.6)
|
||
Currency derivatives
|
Other liabilities
|
1.0
|
(1.7)
|
||
Designated as fair value hedges:
|
|||||
Interest rate swaps
|
Other current assets
|
0.5
|
--
|
||
Interest rate swaps
|
Other assets
|
1.7
|
--
|
||
Not designated as hedges:
|
|||||
Currency derivatives
|
Accrued expenses
|
--
|
(3.8)
|
Three Months Ended
|
|||
July 31
|
|||
(Shares in thousands)
|
2011
|
2012
|
|
Class A (voting) Common Shares:
|
|||
Balance at beginning of period
|
56,561
|
56,251
|
|
Acquisition of treasury stock
|
(64)
|
--
|
|
Stock issued under compensation plans
|
--
|
46
|
|
Stock split (3-for-2)
|
--
|
28,149
|
|
Balance at end of period
|
56,497
|
84,446
|
|
Class B (nonvoting) Common Shares:
|
|||
Balance at beginning of period
|
88,429
|
85,823
|
|
Acquisition of treasury stock
|
(193)
|
--
|
|
Stock issued under compensation plans
|
54
|
80
|
|
Stock split (3-for-2)
|
--
|
42,951
|
|
Balance at end of period
|
88,290
|
128,854
|
|
·
|
declining or depressed global or regional economic conditions, particularly in the Euro zone; political, financial, or credit or capital market instability; supplier, customer or consumer credit or other financial problems; bank failures or governmental debt defaults
|
·
|
failure to develop or implement effective business, portfolio and brand strategies, including the increased U.S. penetration and international expansion of Jack Daniel’s Tennessee Honey, innovation, marketing and promotional activity, and route-to-consumer
|
·
|
unfavorable trade or consumer reaction to our new products, product line extensions, price changes, marketing, or changes in formulation, flavor or packaging
|
·
|
inventory fluctuations in our products by distributors, wholesalers, or retailers
|
·
|
competitors’ consolidation or other competitive activities such as pricing actions (including price reductions, promotions, discounting, couponing or free goods), marketing, category expansion, product introductions, entry or expansion in our geographic markets
|
·
|
declines in consumer confidence or spending, whether related to the economy (such as austerity measures, tax increases, high fuel costs, or higher unemployment), wars, natural or other disasters, weather, pandemics, security concerns, terrorist attacks or other factors
|
·
|
changes in tax rates (including excise, sales, VAT, tariffs, duties, 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, and the unpredictability and suddenness with which they can occur
|
·
|
governmental or other restrictions on our ability to produce, import, sell, price, or market our products, including advertising and promotion in either traditional or new media; regulatory compliance costs
|
·
|
business disruption, decline or costs related to organizational changes, reductions in workforce or other cost-cutting measures
|
·
|
lower returns or discount rates related to pension assets, interest rate fluctuations, inflation or deflation
|
·
|
fluctuations in the U.S. dollar against foreign currencies, especially the euro, British pound, Australian dollar, Polish zloty or Mexican peso
|
·
|
changes in consumer behavior or preferences and our ability to anticipate and respond to them, including societal attitudes or cultural trends that result in reduced consumption of our products; reduction of bar, restaurant, hotel or other on-premise business or travel
|
·
|
consumer shifts away from spirits or premium-priced spirits products; shifts to discount store purchases or other price-sensitive consumer behavior
|
·
|
distribution 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 or higher fixed costs
|
·
|
effects of acquisitions, dispositions, joint ventures, business partnerships or investments, or their termination, including acquisition, integration or termination costs, disruption or other difficulties, or impairment in the recorded value of assets (e.g. receivables, inventory, fixed assets, goodwill, trademarks and other intangibles)
|
·
|
lower profits, due to factors such as fewer or less profitable used barrel sales, lower production volumes, decreased demand or inability to meet consumer demand for products we sell, sales mix shift toward lower priced or lower margin SKUs, or cost increases in energy or raw materials, such as grain, agave, wood, glass, plastic, or closures
|
·
|
natural disasters, climate change, agricultural uncertainties, environmental or other catastrophes, or other factors that affect the availability, price, or quality of agave, grain, glass, energy, closures, plastic, water, or wood, or that cause supply chain disruption or disruption at our production facilities or aging warehouses
|
·
|
negative publicity related to our company, brands, marketing, 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 class action, intellectual property, governmental, or other major litigation; or governmental investigations of beverage alcohol industry business, trade, or marketing practices by us, our importers, distributors, or retailers
|
Three Months Ended
|
|||||
July 31,
|
|||||
2011
|
2012
|
Change
|
|||
Net sales
|
$840.3
|
$878.1
|
4%
|
||
Excise taxes
|
202.5
|
212.3
|
5%
|
||
Cost of sales
|
217.5
|
201.7
|
(7%)
|
||
Gross profit
|
420.3
|
464.1
|
10%
|
||
Advertising expenses
|
90.8
|
92.1
|
1%
|
||
Selling, general, and administrative expenses
|
139.0
|
148.5
|
7%
|
||
Amortization expense
|
1.3
|
--
|
|||
Other (income) expense, net
|
3.3
|
1.8
|
|||
Operating income
|
185.9
|
221.7
|
19%
|
||
Interest expense, net
|
7.1
|
4.6
|
|||
Income before income taxes
|
178.8
|
217.1
|
21%
|
||
Income taxes
|
60.7
|
69.6
|
|||
Net income
|
118.1
|
147.5
|
25%
|
||
Gross margin
|
50.0%
|
52.9%
|
|||
Operating margin
|
22.1%
|
25.2%
|
|||
Effective tax rate
|
34.0%
|
32.1%
|
|||
Earnings per share:
|
|||||
Basic
|
$0.54
|
$0.69
|
27%
|
||
Diluted
|
0.54
|
0.69
|
27%
|
·
|
Jack Daniel’s Family of Brands depletions and reported net sales grew high single digits for the first quarter while net sales on a constant currency
6
basis grew double digits for the same period. This growth was driven by a combination of broad based geographic growth and buy-ins in advance of price increases, most notably for Jack Daniel’s Tennessee Whiskey. Innovation also continued to fuel the growth with the geographic expansion of Jack Daniel’s Tennessee Honey into select new markets outside the U.S. Gentleman Jack and Jack Daniel’s Single Barrel benefitted from strong growth outside the U.S. and buy-in in advance of price increases in the U.S.
|
·
|
Jack Daniel’s ready-to-drink (RTD) brands net sales on a reported basis declined modestly in the quarter driven by the difficult comparisons to the same period a year ago where there was pipeline fill associated with the launch of a line extension in Japan. Excluding Japan, the brands grew in the mid-single digit range on a reported basis. On a constant currency basis, net sales grew modestly and volumetric gains continued in several markets but most notably Mexico and the U.K.
|
·
|
Finlandia net sales grew low single-digits on a reported basis, while depletions and net sales on a constant currency basis improved in the high single digits and double digits, respectively. The brand’s growth was driven largely by volume gains in Poland and Russia where it continues to grow market share per Nielsen data.
|
·
|
Southern Comfort Family of Brands global net sales declined in the mid-single digits during the quarter on a reported basis and slightly on a constant currency basis driven by depletion declines for the parent brand internationally. However, overall depletion trends improved for the brand in the U.S., the brand’s largest market, on the heels of a stronger and more consistent media presence, more effective promotional efforts with the trade, and continued flavor innovation. The positive momentum in the U.S. was offset by a slow start in some key international markets, notably the U.K. and Germany.
|
·
|
Our super-premium brands, which include Herradura, Woodford Reserve, Tuaca, Sonoma- Cutrer and Chambord, collectively grew depletions and net sales on a reported and constant currency basis at double digits.
|
Change vs.
Prior Period
|
||
·
Volumetric growth
|
5%
|
|
·
Portfolio mix
|
3%
|
|
·
Foreign exchange
|
(4%)
|
|
·
Sale of Hopland-based wine business
|
(11%)
|
|
Reported change in cost of sales
|
(7%)
|
Change vs.
Prior Period
|
||
·
Underlying change in gross profit
|
13%
|
|
·
Estimated net change in trade inventories
|
5%
|
|
·
Sale of Hopland-based wine business
|
(1%)
|
|
·
Foreign exchange
|
(7%)
|
|
Reported change in gross profit
|
10%
|
Change vs.
Prior Period
|
||
·
Underlying change in operating income
|
17%
|
|
·
Estimated net change in trade inventories
|
12%
|
|
·
Sale of Hopland-based wine business
|
(1%)
|
|
·
Foreign exchange
|
(9%)
|
|
Reported change in operating income
|
19%
|
BROWN-FORMAN CORPORATION
|
|||
(Registrant)
|
|||
Date: September 5, 2012
|
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)
|
1.
|
To manufacture, distill, compound, blend, rectify, combine, buy, sell, distribute, deal in, export, import, store and warehouse all kinds of distilled spirits, whiskey, gin, high wines, alcohol and all kinds of cereals, grains, beets, yeasts, oils, molasses, and all articles used or useful in connection with the operation of a distillery, and all products or by-products of such articles;
|
2.
|
To manufacture, buy, sell, deal in, distribute, store and warehouse such cooperage as may be used or useful in the operation of a distillery;
|
3.
|
To manufacture, buy, sell, distribute, grow, import, export, store and warehouse all materials and supplies and other articles used or useful or incidental to the operation of a distillery business;
|
4.
|
To carry on a general distilling, redistilling, compounding, blending, bottling, cooperage, storage and warehousing business;
|
5.
|
To issue, register, certify, buy, sell, pledge, assign, transfer, exchange, guarantee and otherwise deal in storage or warehouse receipts;
|
6.
|
To acquire by purchase or otherwise, own, mortgage, pledge, sell, assign, transfer, and otherwise acquire and dispose of and deal in and with goods, wares and merchandise and real and personal property of every class and description wheresoever situated;
|
7.
|
To purchase, acquire, hold, guarantee, sell, assign, transfer, mortgage, pledge, exchange, or otherwise dispose of shares of the capital stock, bonds, debentures, evidences of indebtedness and other securities of any corporation or association, whether foreign or domestic, private or governmental, whether now or hereafter organized, and to issue in exchange therefore its own stocks, bonds or other obligations or securities, and while the holder of any such shares of stock or other securities to exercise all the rights, powers and privileges of ownership, including the right to vote thereon to the same extent as a natural person might or could do;
|
8.
|
To sell or in any manner dispose of, mortgage or pledge any stock, bonds or other obligations or any property, real or personal, which at any time may be held by the Corporation as and when and upon such terms and conditions as the Board of Directors shall determine;
|
9.
|
To acquire all or any part of the good will, rights, property and business of any person, entity, partnership, association or corporation heretofore or hereafter engaged in any business similar to any business which the Corporation has power to conduct, to pay for the same in cash or in stock, bonds or other obligations of the Corporation or otherwise, to hold, utilize and in any manner dispose of the whole or any part of the rights and property so acquired, and to assume in connection therewith any liabilities of any such person, entity, partnership, association or corporation and conduct in any lawful manner the whole or any part of the business thus acquired;
|
10.
|
To acquire, hold, use, sell, assign, lease and grant licenses in respect of, mortgage or otherwise dispose of, letters patent of the United States, or any foreign country, patents, patent rights, licenses and privileges, inventions, improvements and processes, trademarks, and trade-names, relating to or useful in connection with any business of the Corporation;
|
11.
|
To enter into, make, perform and carry out contracts of every kind for any lawful purpose without limit as to amount, with any person, firm, association or Corporation, municipality, county, state, territory, government or other municipal or governmental sub-division;
|
12.
|
From time to time, without limit as to amount, to borrow or raise moneys for any of the purposes of the Corporation and to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment thereof and of the interest thereon by mortgage on, or pledge, conveyance or assignment in trust of, the whole or any part of the assets of the Corporation, real, personal or mixed, including contract rights, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such securities or other obligations of the Corporation for its corporate purposes. To loan its uninvested funds and/or surplus from time to time to such extent as the Corporation may deem advisable, with such security, if any, as the Board of Directors may determine;
|
13.
|
To purchase, hold, sell, transfer, reissue or cancel the shares of its own capital stock or any securities or other obligations of the Corporation in the manner and to the extent now or hereafter permitted by the laws of Delaware;
|
14.
|
The Corporation may conduct its business in the State of Delaware, in other states, the District of Columbia, the territories and colonies of the United States, and in foreign countries, and may hold, own, improve, mortgage, sell, convey, and otherwise dispose of real and personal property of every class and description in any of the states, districts, territories or colonies of the United States, and in all foreign countries, subject to the laws of such state, district, territory, colony or country;
|
15.
|
In general, to carry on any other business in connection with the foregoing, whether manufacturing or otherwise, and to have and to do any and all things incident to or in connection with the objects and purposes of the Corporation hereinabove set forth; provided, however, that the Corporation shall not in any state, territory, district, possession or country carry on any business, or exercise any powers, which a corporation organized under the laws thereof could not carry on or exercise. It is the intention that the objects specified in this Third clause shall, except where otherwise expressed in said clause, be in no wise limited or restricted by reference to or inference from the terms of any other clause in this Certificate of Incorporation, but that the several objects specified in this clause shall be regarded as independent objects, nor shall anything in this clause be held to limit or restrict, in any manner, the powers of this Corporation.
|
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: September 5, 2012
|
By:
|
/s/ 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: September 5, 2012
|
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: September 5, 2012
|
|||
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
|
|||