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Brown-Forman Reports Strong First Quarter Earnings Due to Continued International Growth

Louisville, KY, August 30, 2007 – Brown-Forman Corporation reported diluted earnings per share for its first quarter ended July 31, 2007 of $0.77, up 1% from the $0.76 earned in the first quarter last year.   Underlying earnings per share  for the quarter were up 10%, after adjusting for the following items: $0.05 per share of dilution associated with acquisitions; a $0.04 per share benefit from favorable foreign currency fluctuations; a $0.04 per share net impact of changes in global trade inventory levels; and a $0.01 per share absence of interest income earned in last year’s first quarter on proceeds from the sale of Lenox (which were distributed to shareholders in May 2007).  This 10% underlying growth in earnings for the first quarter reflects accelerating trends for the company’s premium global brands internationally and continued gains from the company’s super-premium developing brands.

(1) All financial and statistical information included in this press release reflects continuing operations of the company for all periods presented unless otherwise indicated.

(2) Underlying earnings per share represent diluted reported earnings per share in accordance with GAAP, adjusted for certain items.  A reconciliation from reported to underlying earnings per share (a non-GAAP measure) for the full year, and the reasons why management believes these adjustments to be useful to the reader, are included in Schedule A of this press release.

Paul Varga, chief executive officer said, “These financial results represent a great start to our fiscal year and a nice continuation of our strong underlying growth.  We are encouraged by healthy consumer demand for our premium global brands, including Jack Daniel’s Tennessee Whiskey, Southern Comfort, and Finlandia, particularly in
international markets.  Our integration and early work with the recently acquired Casa Herradura  brands are on track and we remain optimistic about the company’s overall growth prospects.”

(3) References to Casa Herradura include all brands (el Jimador, Herradura, New Mix, Antiguo, Suave 35 and other brands) and operations acquired in January 2007.

First quarter net sales grew $106 million, up 17% over the prior-year period.  Gross profit increased $42 million, up 12% from the first quarter of last year.  Continuing consumer demand for the company’s premium global brands, the addition of acquired brands, and a weaker U.S. dollar contributed to these strong results. The company’s overall gross margin as a percent of net sales declined due in part to the addition of Casa Herradura results.

Advertising expenses in the quarter were up $13 million, or 16%, over last year’s first quarter due to incremental investments behind the company’s premium global brands, new investments in support of acquired brands, and a weaker U.S. dollar.  SG&A expenses increased approximately $15 million, or 12%, compared to the same prior year period, due primarily to the addition of acquired brands.  Operating income increased $13 million, up 9% over the first quarter last year.

Jack Daniel’s global depletions  registered mid-single digit gains in the quarter, led by double-digit growth outside of the U.S.  The brand’s international volume expansion reflected strong growth in the U.K., France, Australia, Asia, and Eastern Europe.  In the U.S., Jack Daniel’s volume growth rate moderated slightly, increasing at a low-single digit rate for the three-month period.  Global volumes for Southern Comfort grew at a mid-single digit rate in the quarter, as double-digit gains in the U.K., South Africa, and Germany offset modest declines in the U.S.  Worldwide Finlandia volumes accelerated in the quarter, as double-digit increases reflect continued expansion in Eastern Europe.  Depletions for our super-premium developing brands, including Woodford Reserve and Chambord, increased at a double-digit rate in the quarter.  Volumes for our mid-priced regional brands were up mid-single digits, as solid growth for Fetzer Valley Oaks, Korbel, and Bonterra more than offset declines for Canadian Mist, Bolla, and Early Times.

(4)Depletions are shipments from wholesale distributors to retail customers, and are commonly regarded in the industry as an approximate measure of consumer demand.

Full-Year Outlook
The company’s full-year earnings outlook remains unchanged at $3.35 to $3.55 per diluted share, representing growth of 7% to 13% over comparable prior-year earnings of $3.14 per share.  This outlook includes projected earnings dilution of $0.13 to $0.18 per share associated with the Casa Herradura acquisition, which is also unchanged.

Brown-Forman will host a conference call to discuss first quarter results at 10:00 a.m. (EDT) today. All interested parties in the U.S. are invited to join the conference by dialing 888-624-9285 and asking for the Brown-Forman call.  International callers should dial 706-679-3410 and ask for the Brown-Forman call.  No password is required.  The company suggests that the participants dial in approximately 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 Web site,, and then click on the link to “Investor Relations.”

For those unable to participate in the live call, a digital replay will be available by calling 800-642-1687 (U.S.) or 706-645-9291 (international). The identification code is 14130175.  A digital audio recording of the conference call will also be available on the web page approximately one hour after the conclusion of the conference call.  The replays will be available for at least 30 days.

Brown-Forman Corporation is a diversified producer and marketer of fine quality beverage alcohol brands, including Jack Daniel’s, Southern Comfort, Finlandia Vodka, Tequila Herradura, el Jimador Tequila, Canadian Mist, Fetzer and Bolla wines, and Korbel California Champagnes.

Important Note on Forward-Looking Statements:
This release contains statements, estimates, or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “expect,” “believe,” “intend,” “estimate,” “will,” “anticipate,” and “project,” and similar expressions identify a forward-looking statement, which speaks only as of the date the statement is made. 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.  We believe that the expectations and assumptions with respect to our forward-looking statements are reasonable. But by their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that in some cases are out of our control. These factors could cause our actual results to differ materially from Brown-Forman’s historical experience or our present expectations or projections. Here is a non-exclusive list of such risks and uncertainties:

• changes in general economic conditions, particularly in the United States where we earn about half of our profits,
   including higher energy prices, declining home prices, deterioration of the sub-prime lending market, or other
• lower consumer confidence or purchasing related to changes in economic conditions, major natural disasters,
  terrorist attacks or widespread outbreak of infectious diseases;
• tax increases, whether at the federal or state level or in major international markets and/or tariff barriers or other
  restrictions affecting beverage alcohol;
• limitations and restrictions on distribution of products and alcohol marketing, including advertising and promotion,
  as a result of stricter governmental policies adopted either in the United States or in international markets;
• adverse developments in the class action lawsuits filed against Brown-Forman and other spirits, beer and wine
  manufacturers alleging that our industry conspired to promote the consumption of alcohol by those under the legal
 drinking age;
• a strengthening U.S. dollar against foreign currencies, especially the British Pound, Euro, Australian Dollar, and the
  South African Rand;
• reduced bar, restaurant, hotel and travel business, including travel retail;
• longer-term, a change in consumer preferences, social trends or cultural trends that results in the reduced
  consumption of our premium spirits brands;
• changes in distribution arrangements in major markets that limit our ability to market or sell our products;
• adverse impact on performance and reported results as a consequence of integrating acquisitions and ensuring their
  conformance to the company’s trade practice standards, financial controls environment and U.S. public company
• price increases in energy or raw materials, including grapes, grain, agave, wood, glass, and plastic;
• excess wine inventories or a world-wide oversupply of grapes or agave;
• termination of our rights to distribute and market agency brands in our portfolio;
• counterfeit production of our products and any resulting negative effect on our intellectual property rights or brand
  equity; and
• adverse developments as a result of state or federal investigations of beverage alcohol industry trade practices of
  suppliers, distributors and retailers.

Click here for full financial results.