Company Website:
http://www.brown-forman.com
LOUISVILLE, Ky. -- (Business Wire)
Brown-Forman Corporation (NYSE:BFA) (NYSE:BFB) reported financial
results for its third quarter and the first nine months of fiscal 2015
ended January 31, 2015. The company grew reported net sales1
1% to $1,093 million in the third quarter (+5% on an underlying basis2).
Reported operating income increased 7% in the quarter to $272 million
(+8% on an underlying basis). Diluted earnings per share of $0.87 grew
6% in the quarter compared to $0.82 in the prior year period. For the
first nine months of the fiscal year, reported net sales increased 3%
(+5% on an underlying basis), reported operating income increased 2%
(+7% on an underlying basis), and diluted earnings per share increased
4% to $2.54. Foreign exchange negatively impacted reported operating
income growth by seven percentage points during the first nine months.
Paul Varga, the company’s chief executive officer, said, “Brown-Forman's
7% growth in underlying operating income over the first nine months is
impressive against last year’s strong comparisons. Our industry-leading
results were once again driven by our portfolio skew to premium American
whiskey brands and a balanced geographic approach.”
Varga added, “Accelerating growth in the United States, combined with
favorable fourth quarter comparisons, keep us on track to deliver our
full year outlook for underlying sales and operating income growth. As a
result of the recent strengthening of the US dollar, we are reflecting
an additional five cents of negative foreign exchange impact in our
updated full year EPS outlook.”
Year-to-date Fiscal 2015 Highlights
-
Underlying net sales increased over 5%:
-
Price/mix contributed three points to net sales growth and gross
margin expanded 70 bps
-
Jack Daniel’s trademark grew underlying net sales 8% (+5% reported)
-
Jack Daniel’s Tennessee Honey grew underlying net sales 32% (+30%
reported)
-
The company’s super/ultra-premium whiskey brands surpassed one
million cases on a twelve month basis, and grew underlying net
sales double-digits, including 32% growth from the Woodford
Reserve family (+30% reported)
-
Herradura grew underlying net sales 19% (+17% reported)
-
Underlying net sales growth in the United States accelerated to 7%
(+7% reported)
-
Underlying operating income increased 7%
Year-to-date Fiscal 2015 Performance By Market
Underlying net sales grew 6% (-2% reported) in the emerging markets,
powered by double-digit growth in Turkey, Brazil, Indonesia, Ukraine and
sub-Saharan Africa. Russia also delivered growth on an underlying basis,
but reported results declined due to the ruble’s devaluation. Mexico
grew slightly as competitive pressures in mainstream tequila offset
growth in other brands. Poland’s results were down double-digits
compared to the prior year period which reflected significant buy-ins in
advance of the January 1, 2014 excise tax increase. Jack Daniel’s
Tennessee Whiskey grew underlying net sales mid-teens in the emerging
markets.
Underlying net sales in the United States enjoyed continued momentum,
growing 7%, fueled by the Jack Daniel’s trademark which also delivered
7% growth. Primary drivers include share gains for Jack Daniel’s
Tennessee Whiskey and continued double-digit growth of Jack Daniel’s
Tennessee Honey in its fourth year in the market. Gentleman Jack and
Jack Daniel’s Single Barrel aggregate underlying sales grew
double-digits. El Jimador and Herradura also enjoyed double-digit gains
due in part to investments in new packaging and better distribution.
Underlying net sales growth in developed markets outside of the United
States was comparable to first half trends, at 4% (+1% reported). The
United Kingdom, France, and Canada were strong performers, while Germany
and Italy delivered more modest gains. Australia’s results were down
slightly as share gains were not enough to offset weak economic
conditions and competitive pressures.
Global Travel Retail delivered mid-single digit underlying net sales
growth as premiumization trends continue to drive solid gains in
price/mix.
Year-to-date Fiscal 2015 Performance By Brand
The company’s global underlying net sales growth was led by the Jack
Daniel’s trademark, up 8%. Jack Daniel’s Tennessee Honey grew underlying
sales by 32%, driven by expansion into new locations and continued
growth in established markets.
Brown-Forman’s portfolio of super and ultra-premium whiskey brands,
including Woodford Reserve and Woodford Reserve Double Oaked, Jack
Daniel’s Single Barrel, Gentleman Jack, Jack Daniel’s Sinatra Select,
Jack Daniel’s No. 27 Gold, and Collingwood collectively surpassed one
million cases on a twelve month basis. These brands are capitalizing on
consumer interest in super- and ultra-premium whiskey brands, and are
increasingly important drivers of growth for the company, delivering
high-teens underlying net sales growth. Woodford Reserve’s family of
brands led the way, with 32% growth in underlying net sales. Old
Forester grew underlying net sales double-digits with strong on-premise
trends and the launch of Old Forester 1870.
Finlandia vodka’s family of brands experienced a 9% decline in
underlying net sales due primarily to the previously mentioned
comparison issues in Poland.
Herradura grew underlying net sales double-digits, with large gains in
the United States and Mexico. Herradura’s results in Mexico benefited
from the recent launch of Herradura Ultra. El Jimador grew double-digits
in the United States, but was down in Mexico following a recent price
increase taken in a highly competitive mainstream tequila category.
Southern Comfort’s family of brands experienced a 5% decline in
underlying net sales driven primarily by pressure from flavored whiskies.
Sonoma-Cutrer grew underlying net sales by high-single digits and Korbel
grew underlying net sales by mid-single digits.
Other P&L Items
Company-wide price/mix improvements contributed approximately three
points of sales growth year-to-date. Better price/mix helped deliver
gross margin expansion of 70 bps. Year-to-date underlying A&P spend
increased 4% (+1% reported) and underlying SG&A increased 9% (+7%
reported) compared to the prior year period. SG&A growth reflects the
impact from the route-to-market changes made in France on January 1,
2014, as well as the timing of spend.
Financial Stewardship
On January 20, 2015, Brown-Forman declared a regular quarterly cash
dividend of $0.315 per share on its Class A and Class B common stock, an
8.6% increase over the prior dividend, resulting in an annualized cash
dividend of $1.26 per share. The cash dividend is payable on April 1,
2015 to stockholders of record on March 10, 2015. Brown-Forman has paid
regular quarterly cash dividends for 69 consecutive years and has
increased the dividend for 31 consecutive years.
During the first nine months of fiscal 2015, the company repurchased a
combined total of 3.0 million Class A and Class B shares for $269
million, at an average price of $90.41 per share. The company has $184
million remaining on its current $250 million share repurchase
authorization.
Fiscal Year 2015 Outlook
Assuming stable global market conditions, the company is reaffirming its
underlying growth outlook for fiscal 2015, including 6-8% growth in
underlying net sales and 9-11% growth in underlying operating income.
The company also expects reported results to continue to be negatively
impacted by the strong appreciation of the U.S. dollar compared to other
currencies. After considering current spot rates versus the prior year
rates, as well as the company’s hedge positions, the company anticipates
a mid-single digit currency headwind on reported operating income growth
for the full year. This would negatively impact full year earnings per
share by $0.20, compared to the $0.15 per share impact expected at the
time of the second quarter earnings call. The company now expects
diluted earnings per share of $3.15 to $3.25, which incorporates this
incremental negative impact from foreign exchange.
Conference Call Details
Brown-Forman will host a conference call to discuss the results at 10:00
a.m. (EST) this morning. All interested parties in the United States are
invited to join the conference call by dialing 888-624-9285 and asking
for the Brown-Forman call. International callers should dial
+1-706-679-3410. The company suggests that participants dial in ten
minutes in advance of the 10:00 a.m. start of the conference call.
A live audio broadcast of the conference call will also be available via
Brown-Forman’s Internet website, http://www.brown-forman.com/,
through a link to “Investor Relations.” A digital audio recording of the
conference call will be available on the website approximately two hours
after the conclusion of the conference call. The replay will be
available for at least 30 days following the conference call.
For more than 140 years, Brown-Forman Corporation has enriched the
experience of life by responsibly building fine quality beverage alcohol
brands, including Jack Daniel’s Tennessee Whiskey, Jack Daniel’s
Tennessee Honey, Southern Comfort, Finlandia, Jack Daniel’s & Cola,
Canadian Mist, Korbel, Gentleman Jack, el Jimador, Herradura,
Sonoma-Cutrer, Chambord, New Mix, Tuaca, and Woodford Reserve.
Brown-Forman’s brands are supported by nearly 4,200 employees and sold
in approximately 160 countries worldwide. For more information about the
company, please visit http://www.brown-forman.com/.
Footnotes:
1 Percentage growth rates are compared to prior year periods,
unless otherwise noted.
2 We present changes in certain
income statement line-items that are adjusted to an “underlying” basis,
which we believe assists in understanding both our performance from
period to period on a consistent basis and the trends of our business.
Non-GAAP “underlying” measures include changes in (a) underlying net
sales, (b) underlying cost of sales, (c) underlying gross profit, (d)
underlying advertising expenses, (e) underlying selling, general and
administrative expenses and (f) underlying operating income. A
reconciliation of each of these non-GAAP measures for the three-month
and nine-month periods ending January 31, 2015, to the most closely
comparable GAAP measure, and the reasons why management believes these
adjustments to be useful to the reader, are included in Schedule A in
this press release.
This press release contains statements, estimates, and projections that
are “forward-looking statements” as defined under U.S. federal
securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,”
“continue,” “could,” “envision,” “estimate,” “expect,” “expectation,”
“intend,” “may,” “plan,” “potential,” “project,” “pursue,” “see,”
“seek,” “should,” “will,” “will continue,” and similar words identify
forward-looking statements, which speak only as of the date we make
them. Except as required by law, we do not intend to update or revise
any forward-looking statements, whether as a result of new information,
future events, or otherwise. By their nature, forward-looking statements
involve risks, uncertainties and other factors (many beyond our control)
that could cause our actual results to differ materially from our
historical experience or from our current expectations or projections.
These risks and other factors include, but are not limited to:
-
Unfavorable global or regional economic conditions, and related low
consumer confidence, high unemployment, weak credit or capital
markets, sovereign debt defaults, sequestrations, austerity measures,
higher interest rates, political instability, higher inflation,
deflation, lower returns on pension assets, or lower discount rates
for pension obligations
-
Risks associated with being a U.S.-based company with global
operations, including commercial, political and financial risks; local
labor policies and conditions; protectionist trade policies or
economic or trade sanctions; compliance with local trade practices and
other regulations, including anti-corruption laws; terrorism; and
health pandemics
-
Fluctuations in foreign currency exchange rates
-
Changes in laws, regulations or policies - especially those that
affect the production, importation, marketing, sale or consumption of
our beverage alcohol products
-
Tax rate changes (including excise, sales, VAT, tariffs, duties,
corporate, individual income, dividends, capital gains) or changes 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
-
Dependence upon the continued growth of the Jack Daniel’s family of
brands
-
Changes in consumer preferences, consumption or purchase patterns -
particularly away from brown spirits, our premium products, or spirits
generally, and our ability to anticipate and react to them; bar,
restaurant, travel or other on-premise declines; unfavorable consumer
reaction to new products, line extensions, package changes, product
reformulations, or other product innovation
-
Decline in the social acceptability of beverage alcohol products in
significant markets
-
Production facility, aging warehouse or supply chain disruption
-
Imprecision in supply/demand forecasting
-
Higher costs, lower quality or unavailability of energy, input
materials, labor or finished goods
-
Route-to-consumer changes that affect the timing of our sales,
temporarily disrupt the marketing or sale of our products, or result
in higher implementation-related or fixed costs
-
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, or entry or expansion in our geographic markets or
distribution networks
-
Risks associated with acquisitions, dispositions, business
partnerships or investments - such as acquisition integration, or
termination difficulties or costs, or impairment in recorded value
-
Insufficient protection of our intellectual property rights
-
Product recalls or other product liability claims; product
counterfeiting, tampering, or product quality issues
-
Significant legal disputes and proceedings; government investigations
(particularly of industry or company business, trade or marketing
practices)
-
Failure or breach of key information technology systems
-
Negative publicity related to our company, brands, marketing,
personnel, operations, business performance or prospects
-
Our status as a family ”controlled company” under New York Stock
Exchange rules
-
Business disruption, decline or costs related to organizational
changes, reductions in workforce or other cost-cutting measures, or
our failure to attract or retain key executive or employee talent
For further information on these and other risks, please refer to the
“Risk Factors” section of our annual report on Form 10-K and quarterly
reports on Form 10-Q filed with the SEC.
Use of Non-GAAP Financial Information: This press release
includes measures not derived in accordance with U.S. generally accepted
accounting principles (“GAAP”), including underlying net sales,
underlying gross profit, underlying advertising expense, underlying
SG&A, and underlying operating income. These measures should not be
considered in isolation or as a substitute for any measure derived in
accordance with GAAP, and also may be inconsistent with similar measures
presented by other companies. Reconciliations of these measures to the
most closely comparable GAAP measures, and reasons for the company’s use
of these measures, are presented on Schedules A and B attached hereto.
|
| | |
| | |
| |
Brown-Forman Corporation
Unaudited Consolidated Statements of Operations
For the Three Months Ended January 31, 2014 and 2015
(Dollars in millions, except per share amounts)
|
| | | | | | | |
|
| |
2014
| |
2015
| |
Change
|
| | | | | | | |
|
| | | | | | | | | |
|
Net sales
| |
$
|
1,078
| | |
$
|
1,093
| | |
1%
|
Excise taxes
| |
296
| | |
280
| | |
(5%)
|
Cost of sales
| |
250
|
| |
260
|
| |
4%
|
Gross profit
| |
532
| | |
553
| | |
4%
|
Advertising expenses
| |
116
| | |
112
| | |
(3%)
|
Selling, general, and administrative expenses
| |
161
| | |
163
| | |
1%
|
Other expense (income), net
| |
—
|
| |
6
|
| | |
Operating income
| |
255
| | |
272
| | |
7%
|
Interest expense, net
| |
6
|
| |
6
|
| | |
Income before income taxes
| |
249
| | |
266
| | |
7%
|
Income taxes
| |
72
|
| |
80
|
| | |
Net income
| |
$
|
177
|
| |
$
|
186
|
| |
5%
|
| | | | | | | |
|
Earnings per share:
| | | | | | | | |
Basic
| |
$
|
0.83
| | |
$
|
0.88
| | |
6%
|
Diluted
| |
$
|
0.82
| | |
$
|
0.87
| | |
6%
|
| | | | | | | |
|
Gross margin
| |
49.3
|
%
| |
50.6
|
%
| | |
Operating margin
| |
23.6
|
%
| |
24.9
|
%
| | |
| | | | | | | |
|
Effective tax rate
| |
28.8
|
%
| |
30.0
|
%
| | |
| | | | | | | |
|
Cash dividends paid per common share
| |
$
|
0.290
| | |
$
|
0.315
| | | |
| | | | | | | |
|
Shares (in thousands) used in the calculation of earnings per share
| | | | | | | | |
Basic
| |
213,151
| | |
211,126
| | | |
Diluted
| |
214,792
| | |
212,606
| | | |
| | | | | | | |
|
|
| | |
| | |
| |
Brown-Forman Corporation
Unaudited Consolidated Statements of Operations
For the Nine Months Ended January 31, 2014 and 2015
(Dollars in millions, except per share amounts)
|
| | | | | | | |
|
| |
2014
| |
2015
| |
Change
|
| | | | | | | |
|
Net sales
| |
$
|
3,053
| | |
$
|
3,149
| | |
3%
|
Excise taxes
| |
751
| | |
754
| | |
0%
|
Cost of sales
| |
717
|
| |
738
|
| |
3%
|
Gross profit
| |
1,585
| | |
1,657
| | |
5%
|
Advertising expenses
| |
329
| | |
334
| | |
1%
|
Selling, general, and administrative expenses
| |
479
| | |
512
| | |
7%
|
Other expense (income), net
| |
(6
|
)
| |
16
|
| | |
Operating income
| |
783
| | |
795
| | |
2%
|
Interest expense, net
| |
18
|
| |
20
|
| | |
Income before income taxes
| |
765
| | |
775
| | |
1%
|
Income taxes
| |
239
|
| |
232
|
| | |
Net income
| |
$
|
526
|
| |
$
|
543
|
| |
3%
|
| | | | | | | |
|
Earnings per share:
| | | | | | | | |
Basic
| |
$
|
2.46
| | |
$
|
2.56
| | |
4%
|
Diluted
| |
$
|
2.45
| | |
$
|
2.54
| | |
4%
|
| | | | | | | |
|
Gross margin
| |
51.9
|
%
| |
52.6
|
%
| | |
Operating margin
| |
25.6
|
%
| |
25.2
|
%
| | |
| | | | | | | |
|
Effective tax rate
| |
31.2
|
%
| |
29.9
|
%
| | |
| | | | | | | |
|
Cash dividends paid per common share
| |
$
|
0.800
| | |
$
|
0.895
| | | |
| | | | | | | |
|
Shares (in thousands) used in the calculation of earnings per share
| | | | | | | | |
Basic
| |
213,493
| | |
212,189
| | | |
Diluted
| |
215,116
| | |
213,701
| | | |
| | | | | | | |
|
|
| |
| |
Brown-Forman Corporation
Unaudited Condensed Consolidated Balance Sheets
(Dollars in millions)
|
| | | |
|
| |
April 30, 2014
| |
January 31, 2015
|
Assets:
| | | | | |
Cash and cash equivalents
| |
$
|
437
| | |
$
|
250
|
Accounts receivable, net
| |
569
| | |
631
|
Inventories
| |
882
| | |
920
|
Other current assets
| |
289
|
| |
408
|
Total current assets
| |
2,177
| | |
2,209
|
| | | | |
|
Property, plant, and equipment, net
| |
526
| | |
567
|
Goodwill
| |
620
| | |
607
|
Other intangible assets
| |
677
| | |
619
|
Other assets
| |
103
|
| |
159
|
Total assets
| |
$
|
4,103
|
| |
$
|
4,161
|
| | | | |
|
Liabilities:
| | | | | |
Accounts payable and accrued expenses
| |
$
|
474
| | |
$
|
511
|
Dividends payable
| |
—
| | |
66
|
Accrued income taxes
| |
71
| | |
16
|
Short-term borrowings
| |
8
| | |
8
|
Current portion of long-term debt
| |
—
| | |
250
|
Other current liabilities
| |
8
|
| |
9
|
Total current liabilities
| |
561
| | |
860
|
| | | | |
|
Long-term debt
| |
997
| | |
748
|
Deferred income taxes
| |
102
| | |
129
|
Accrued postretirement benefits
| |
244
| | |
229
|
Other liabilities
| |
167
|
| |
154
|
Total liabilities
| |
2,071
| | |
2,120
|
| | | | |
|
Stockholders’ equity
| |
2,032
|
| |
2,041
|
| | | | |
|
Total liabilities and stockholders’ equity
| |
$
|
4,103
|
| |
$
|
4,161
|
| | | | | | |
|
|
| | |
| | |
Brown-Forman Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended January 31, 2014 and 2015
(Dollars in millions)
|
| | | | | |
|
| |
2014
| |
2015
|
| | | | | |
|
Cash provided by operating activities
| |
$
|
390
| | |
$
|
375
| |
| | | | | |
|
Cash flows from investing activities:
| | | | | | |
Additions to property, plant, and equipment
| |
(87
|
)
| |
(92
|
)
|
Other
| |
(2
|
)
| |
(4
|
)
|
Cash used for investing activities
| |
(89
|
)
| |
(96
|
)
|
| | | | | |
|
Cash flows from financing activities:
| | | | | | |
Net issuance of debt
| |
6
| | |
1
| |
Acquisition of treasury stock
| |
(49
|
)
| |
(271
|
)
|
Dividends paid
| |
(171
|
)
| |
(190
|
)
|
Other
| |
—
|
| |
11
|
|
Cash used for financing activities
| |
(214
|
)
| |
(449
|
)
|
| | | | | |
|
Effect of exchange rate changes on cash and cash equivalents
| |
(4
|
)
| |
(17
|
)
|
| | | | | |
|
Net decrease in cash and cash equivalents
| |
83
| | |
(187
|
)
|
| | | | | |
|
Cash and cash equivalents, beginning of period
| |
204
|
| |
437
|
|
| | | | | |
|
Cash and cash equivalents, end of period
| |
$
|
287
|
| |
$
|
250
|
|
| | | | | | | |
|
|
Schedule A |
|
Brown-Forman Corporation |
Supplemental Information (Unaudited) |
|
|
| |
| |
|
| |
| | |
|
|
| | |
|
| | | Three Months Ended | | Nine Months Ended | | |
Fiscal Year Ended
|
| | | January 31, 2015 |
| January 31, 2015 | | |
April 30, 2014
|
| | | | | | | |
|
| | | | | | | |
|
| | | | | | | |
|
Reported change in net sales | | | 1 | % | | 3 | % | | | 4 | % |
Impact of foreign currencies
| | |
5
|
%
| |
3
|
%
| | |
1
|
%
|
Estimated net change in distributor inventories
| | |
(1
|
)%
| |
(1
|
)%
| | |
1
|
%
|
| | | | | | | |
|
Underlying change in net sales | | | 5 | % |
| 5 | % | | | 6 | % |
| | | | | | | |
|
| | | | | | | |
|
Reported change in gross profit | | | 4 | % | | 5 | % | | | 6 | % |
Impact of foreign currencies
| | |
5
|
%
| |
3
|
%
| | |
1
|
%
|
Estimated net change in distributor inventories
| | |
(3
|
)%
| |
(1
|
)%
| | |
1
|
%
|
| | | | | | | |
|
Underlying change in gross profit | | | 7 | % |
| 7 | % | | | 8 | % |
| | | | | | | |
|
Reported change in advertising | | | (3 | )% | | 1 | % | | | 7 | % |
Impact of foreign currencies
| | |
6
|
%
| |
3
|
%
| | |
1
|
%
|
| | | | | | | |
|
Underlying change in advertising | | | 3 | % |
| 4 | % | | | 8 | % |
| | | | | | | |
|
Reported change in SG&A | | | 1 | % | | 7 | % | | | 5 | % |
Impact of foreign currencies
| | |
5
|
%
| |
2
|
%
| | |
1
|
%
|
Estimated net change in distributor inventories
| | |
-
| | |
-
| | | |
-
| |
| | | | | | | |
|
Underlying change in SG&A | | | 6 | % |
| 9 | % | | | 6 | % |
| | | | | | | |
|
Reported change in operating income | | | 7 | % | | 2 | % | | | 8 | % |
Impact of foreign currencies
| | |
7
|
%
| |
7
|
%
| | |
-
| |
Estimated net change in distributor inventories
| | |
(6
|
)%
| |
(2
|
)%
| | |
3
|
%
|
| | | | | | | |
|
Underlying change in operating income | | | 8 | % |
| 7 | % | | | 11 | % |
| | | | | | | |
|
Note: Totals may differ due to rounding
|
|
Notes:
We present changes in certain income statement line-items that are
adjusted to an “underlying” basis, which are non-GAAP measures that we
believe assist in understanding both our performance from period to
period on a consistent basis, and the trends of our business.
To calculate each of the measures reflected above, we adjust for (a)
foreign currency exchange and (b) if applicable, estimated net changes
in trade inventories. These adjustments are defined below.
-
“Foreign exchange.” We calculate the percentage change in our income
statement line-items in accordance with GAAP and adjust to exclude the
cost or benefit of currency fluctuations. Adjusting for foreign
exchange allows us to understand our business on a constant dollar
basis, as fluctuations in exchange rates can distort the underlying
trend both positively and negatively. (In this press release, “dollar”
always means the U.S. dollar unless clearly denoted otherwise.) To
eliminate the effect of foreign exchange fluctuations when comparing
across periods, we translate current year results at prior-year rates.
-
“Estimated net change in trade inventories.” This term refers to the
estimated net effect of changes in distributor inventories on changes
in our measures. For each period being compared, we estimate the
effect of distributor inventory changes on our results using depletion
information provided to us by our distributors. We believe that this
adjustment reduces the effect of varying levels of distributor
inventories on changes in our measures and allows to understand better
our underlying results and trends.
Management uses “underlying” measures of performance to assist it in
comparing and measuring our performance from period to period on a
consistent basis, and in comparing our performance to that of our
competitors. We also use underlying measures as metrics of management
incentive compensation calculations. Management also uses underlying
measures in its planning and forecasting and in communications with the
board of directors, stockholders, analysts and investors concerning our
financial performance. We have provided reconciliations of the non-GAAP
measures adjusted to an “underlying” basis to their most closely
comparable GAAP measures and have consistently applied the adjustments
within our reconciliations in arriving at each non-GAAP measure.
|
| |
Schedule B |
| |
|
Brown-Forman Corporation Supplemental Brand Information (Unaudited) Nine Months Ended January 31, 2015 |
| |
|
| | % Change vs. FY2014 |
Brand | | Depletions1 |
| Net Sales2 |
| 9-Liter |
| Equivalent Conversion3 |
| Reported |
| Foreign Exchange |
| Estimated Net Change in Trade Inventories |
| Underlying |
Jack Daniel’s Family
|
|
5
|
%
|
|
6
|
%
|
|
5
|
%
|
| 3 | % |
| (1 | )% |
|
8
|
%
|
Jack Daniel’s Tennessee Whiskey
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
| 3 | % |
| (1 | )% |
|
6
|
%
|
Jack Daniel’s Tennessee Honey
|
|
31
|
%
|
|
31
|
%
|
|
30
|
%
|
| 3 | % |
| (1 | )% |
|
32
|
%
|
Other Jack Daniel’s Whiskey Brands4 |
|
22
|
%
|
|
22
|
%
|
|
17
|
%
|
| 2 | % |
| (1 | )% |
|
18
|
%
|
Jack Daniel’s RTD/RTP5 |
|
2
|
%
|
|
2
|
%
|
|
(3
|
)%
|
| 4 | % |
| 0 | % |
|
1
|
%
|
Southern Comfort Family
|
|
(5
|
)%
|
|
(4
|
)%
|
|
(6
|
)%
|
| 2 | % |
| (1 | )% |
|
(5
|
)%
|
Finlandia Family
|
|
(8
|
)%
|
|
(8
|
)%
|
|
(13
|
)%
|
| 5 | % |
| (1 | )% |
|
(9
|
)%
|
el Jimador6 |
|
(3
|
)%
|
|
(3
|
)%
|
|
3
|
%
|
| 3 | % |
| (1 | )% |
|
4
|
%
|
New Mix RTD7 |
|
4
|
%
|
|
4
|
%
|
|
1
|
%
|
| 4 | % |
| 0 | % |
|
5
|
%
|
Herradura
|
|
11
|
%
|
|
11
|
%
|
|
17
|
%
|
| 3 | % |
| (1 | )% |
|
19
|
%
|
Woodford Reserve Family
|
|
30
|
%
|
|
30
|
%
|
|
30
|
%
|
| 1 | % |
| 1 | % |
|
32
|
%
|
Canadian Mist Family
|
|
(5
|
)%
|
|
(5
|
)%
|
|
(5
|
)%
|
| 0 | % |
| (1 | )% |
|
(5
|
)%
|
Rest of Brand Portfolio (excl. Discontinued Brands)
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
| 1 | % |
| — | % |
|
4
|
%
|
Total Portfolio |
| 2 | % |
| 2 | % |
| 3 | % |
| 3 | % |
| (1 | )% |
| 5 | % |
| | | |
| | |
| | |
| | |
| | |
| | |
Note: Totals may differ due to rounding.
|
|
1 Depletions are shipments direct to retail or from
distributors to wholesale and retail customers, and are commonly
regarded in the industry as an approximate measure of consumer
demand.
|
2 Net sales is a shipment based metric; shipments and
depletions can be different due to timing. Please see the Notes to
Schedule A in this press release for additional information on the
impact of foreign currencies and estimated net change in
distributor inventories and the reasons why we believe that the
presentation of these non-GAAP financial measures provides useful
information to investors.
|
3Equivalent conversion depletions represent the
conversion of ready-to-drink (RTD) and ready-to-pour (RTP) brands
to a similar drinks equivalent as the parent brand for various
trademark families. RTD volumes are divided by 10, while RTP
volumes are divided by 5.
|
4 Includes Gentlemen Jack, Jack Daniel's Single Barrel,
Sinatra Select, No. 27 Gold, Jack Daniel's Tennessee Fire, Jack
Daniel's Master's Collection, Jack Daniel's Rye and Jack Daniel's
1907.
|
5 Refers to all ready-to-drink (RTD) and ready-to-pour
(RTP) line extensions of Jack Daniel’s.
|
6 Includes el Jimador, el Jimador flavors, and el
Jimador RTDs.
|
7 New Mix RTD brand produced with el Jimador tequila.
|
Contacts:
Brown-Forman Corporation
Phil Lynch, 502-774-7928
Vice
President
Director Corporate Communications and Public Relations
or
Jay
Koval, 502-774-6903
Vice President
Director Investor Relations
Source: Brown-Forman Corporation
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