UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): September 8, 2005 (September 1, 2005)
Brown-Forman Corporation
(Exact name of registrant as specified in its charter)
Delaware 002-26821 61-0143150
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
850 Dixie Highway, Louisville, Kentucky 40210
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (502) 585-1100
INFORMATION TO BE INCLUDED IN THE REPORT
Brown-Forman Corporation (the "Company or Brown-Forman") hereby amends its
Current Report on Form 8-K filed with the Commission on September 2, 2005 to
provide the required pro forma financial statements of the Company relating to
the disposition by the Company of substantially all of Lenox, Incorporated
("Lenox") to Department 56, Inc. ("Department 56").
Item 2.01 Completion of Acquisition or Disposition of Assets.
A previously reported, on September 1, 2005, Brown-Forman completed the sale of
substantially all of Lenox to Department 56 for $196 million in cash (subject to
a post-closing working capital adjustment) pursuant to the Stock Purchase
Agreement entered into by the Company and Department 56 on July 21, 2005. Please
refer to the Company's Current Report on Form 8-K filed with the Commission on
September 2, 2005 for additional information.
Item 9.01. Financial Statements and Exhibits
(a) Not applicable.
(b) Pro Forma Financial Information (Unaudited)
Introduction to Pro Forma Financial Statements (Unaudited) F-1
Pro Forma Balance Sheet as of July 31, 2005 (Unaudited) F-2
Pro Forma Statement of Operations (Unaudited)
Three months ended July 31, 2005 F-3
Year Ended April 30, 2005 F-4
Year Ended April 30, 2004 F-5
Year Ended April 30, 2003 F-6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Brown-Forman Corporation
(Registrant)
Date: September 8, 2005 By: /s/ Nelea A. Absher
Nelea A. Absher
Vice President and
Assistant Corporate Secretary
Brown-Forman Corporation
Introduction to Pro Forma Financial Statements
(Unaudited)
The following presents the Company's unaudited pro forma financial information
as of July 31, 2005, for the three months ended July 31, 2005, and for each of
the three years in the period ended April 30, 2005. The unaudited pro forma
condensed consolidated statements of operations give effect to the Company's
sale of Lenox as if it had occurred on May 1, 2002. The unaudited pro forma
balance sheet has been prepared as if the sale had occurred on July 31, 2005.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the Company's historical consolidated financial
statements and accompanying notes. The unaudited pro forma condensed
consolidated financial statements may not necessarily reflect the financial
position or results of operations that would have been obtained if the
transaction had been consummated on the dates indicated in the unaudited pro
forma condensed consolidated financial statements. In addition, the unaudited
pro forma condensed consolidated financial statements do not purport to be
indicative of the Company's future operating results.
F-1
Brown-Forman Corporation
Pro Forma Balance Sheet (Unaudited)
July 31, 2005
Divested Sales
(Dollars in millions) Historical Operations(a) Proceeds(b) Pro Forma
---------- ------------ ---------- ---------
Assets:
Cash and cash equivalents $ 265.3 $196.5 $461.8
Accounts receivable, net 321.0 321.0
Inventories 488.0 488.0
Current portion of deferred income taxes 69.9 69.9
Current assets held for sale 176.6 $(164.9) 11.7
Other current assets 19.5 19.5
------- ------- ------- -------
Total current assets 1,340.3 (164.9) 196.5 1,371.9
Property, plant, and equipment, net 414.2 414.2
Prepaid pension cost 128.5 128.5
Trademarks and brand names 331.5 331.5
Goodwill 188.5 188.5
Noncurrent assets held for sale 154.9 (147.7) 7.2
Other assets 38.8 38.8
------- ------- ------- -------
Total assets $2,596.7 $(312.6) $196.5 $2,480.6
======= ======= ======= =======
Liabilities:
Accounts payable and accrued expenses $ 227.1 $227.1
Accrued income taxes 75.1 75.1
Dividends payable 29.9 29.9
Current portion of long-term debt 249.3 249.3
Current liabilities held for sale 63.8 $(62.2) 1.6
------- ------- ------- -------
Total current liabilities 645.2 (62.2) 583.0
Long-term debt 351.6 351.6
Deferred income taxes 155.2 155.2
Accrued postretirement benefits 79.4 79.4
Noncurrent liabilities held for sale 84.7 (84.7) --
Other liabilities 18.4 18.4
------- ------- ------- -------
Total liabilities 1,334.5 (146.9) 1,187.6
Stockholders' equity:
Accumulated other comprehensive loss (20.7) 27.5 6.8
Other stockholders' equity 1,282.9 (193.2) $196.5 1,286.2
------- ------- ------- -------
Total stockholders' equity 1,262.2 (165.7) 196.5 1,293.0
------- ------- ------- -------
Total liabilities and stockholders' equity $2,596.7 $(312.6) $196.5 $2,480.6
======= ======= ======= =======
Notes to Unaudited Pro Forma Balance Sheet as of July 31, 2005
(a) To eliminate the book value of Lenox assets and liabilities sold to Department 56.
(b) To record proceeds from sale of Lenox to Department 56.
Brown-Forman Corporation
Pro Forma Statement of Operations
For the Three Months Ended July 31, 2005
(Unaudited)
(Dollars in millions, except per share amounts) Divested
Historical Operations(c) Pro Forma
--------- ------------ ---------
Net sales $ 547.5 $ 547.5
Excise taxes 97.7 97.7
Cost of sales 146.8 146.8
------- ------- -------
Gross profit 303.0 303.0
Advertising expenses 72.3 72.3
Selling, general, and administrative expenses 110.3 110.3
Other expense (income), net (13.7) (13.7)
------- ------- -------
Operating income 134.1 134.1
Interest income 1.9 1.9
Interest expense 4.5 4.5
------- ------- -------
Income from continuing operations
before income taxes 131.5 131.5
Income taxes 43.6 43.6
------- ------- -------
Income from continuing operations 87.9 87.9
Loss from discontinued operations,
net of income taxes (75.1) $ (74.8) (0.3)
------- ------- -------
Net income $ 12.8 $ (74.8) $ 87.6
======= ======= =======
Basic earnings (loss) per share:
Continuing operations $ 0.72 $ 0.72
Discontinued operations (0.62) $ (0.62) --
------- ------- -------
Total $ 0.10 $ (0.62) $ 0.72
======= ======= =======
Diluted earnings (loss) per share:
Continuing operations $ 0.71 $ 0.71
Discontinued operations (0.61) $ (0.61) --
------- ------- -------
Total $ 0.10 $ (0.61) $ 0.71
======= ======= =======
Shares (in thousands) used in the
calculation of earnings (loss) per share:
Basic 121,945 121,945
Diluted 123,161 123,161
Note to Unaudited Pro Forma Statement of Operations for the Three Months Ended July 31, 2005
(c) To eliminate the Lenox operations sold to Department 56 from historical operating results.
F-3
Brown-Forman Corporation
Pro Forma Statement of Operations
For the Year Ended April 30, 2005
(Unaudited)
(Dollars in millions, except per share amounts) Divested
Historical Operations(c) Pro Forma
--------- ------------ ---------
Net sales $2,728.8 $ 465.1 $2,263.7
Excise taxes 416.6 416.6
Cost of sales 912.3 260.9 651.4
------- ------- -------
Gross profit 1,399.9 204.2 1,195.7
Advertising expenses 370.9 60.6 310.3
Selling, general, and administrative expenses 573.6 135.8 437.8
Goodwill impairment 37.0 37.0 --
Other expense (income), net 0.4 2.2 (1.8)
------- ------- -------
Operating income 418.0 (31.4) 449.4
Gain on sale of investment in affiliate 72.2 72.2
Interest income 6.8 6.8
Interest expense 20.6 20.6
------- ------- -------
Income before income taxes 476.4 (31.4) 507.8
Income taxes 168.1 2.2 165.9
------- ------- -------
Net income $ 308.3 $ (33.6) $ 341.9
======= ======= =======
Earnings per share:
Basic $ 2.53 $ (0.28) $ 2.81
Diluted 2.52 (0.27) 2.79
Shares (in thousands) used in the
calculation of earnings per share:
Basic 121,746 121,746
Diluted 122,507 122,507
Note to Unaudited Pro Forma Statement of Operations for the Year Ended April 30, 2005
(c) To eliminate the Lenox operations sold to Department 56 from historical operating results.
F-4
Brown-Forman Corporation
Pro Forma Statement of Operations
For the Year Ended April 30, 2004
(Unaudited)
(Dollars in millions, except per share amounts) Divested
Historical Operations(c) Pro Forma
--------- ------------ ---------
Net sales $2,576.8 $ 522.0 $2,054.8
Excise taxes 363.7 363.7
Cost of sales 914.9 283.7 631.2
------- ------- -------
Gross profit 1,298.2 238.3 1,059.9
Advertising expenses 353.8 73.9 279.9
Selling, general, and administrative expenses 533.0 142.6 390.4
Other expense (income), net 10.8 6.6 4.2
------- ------- -------
Operating income 400.6 15.2 385.4
Interest income 1.8 1.8
Interest expense 21.1 (0.5) 21.6
------- ------- -------
Income before income taxes 381.3 15.7 365.6
Income taxes 127.4 6.1 121.3
------- ------- -------
Net income $ 253.9 $ 9.6 $ 244.3
======= ======= =======
Earnings per share:
Basic $ 2.09 $ 0.08 $ 2.01
Diluted 2.08 0.08 2.00
Shares (in thousands) used in the
calculation of earnings per share:
Basic 121,359 121,359
Diluted 121,986 121,986
Note to Unaudited Pro Forma Statement of Operations for the Year Ended April 30, 2004
(c) To eliminate the Lenox operations sold to Department 56 from historical operating results.
F-5
Brown-Forman Corporation
Pro Forma Statement of Operations
For the Year Ended April 30, 2003
(Unaudited)
(Dollars in millions, except per share amounts) Divested
Historical Operations(c) Pro Forma
--------- ------------ ---------
Net sales $2,376.3 $ 525.7 $1,850.6
Excise taxes 317.5 317.5
Cost of sales 878.5 275.9 602.6
------- ------- -------
Gross profit 1,180.3 249.8 930.5
Advertising expenses 321.3 77.9 243.4
Selling, general, and administrative expenses 491.3 138.2 353.1
Other expense (income), net (4.5) 2.7 (7.2)
------- ------- -------
Operating income 372.2 31.0 341.2
Interest income 2.3 0.3 2.0
Interest expense 7.9 0.1 7.8
------- ------- -------
Income before income taxes 366.6 31.2 335.4
Income taxes 125.1 12.2 112.9
------- ------- -------
Net income $ 241.5 $ 19.0 $ 222.5
======= ======= =======
Earnings per share:
Basic $ 1.79 $ 0.14 $ 1.65
Diluted 1.79 0.14 1.65
Shares (in thousands) used in the
calculation of earnings per share:
Basic 134,748 134,748
Diluted 135,126 135,126
Note to Unaudited Pro Forma Statement of Operations for the Year Ended April 30, 2003
(c) To eliminate the Lenox operations sold to Department 56 from historical operating results.
F-6