Brown-Forman Shareholders Salute Retiring Chairman and Healthy Business
Louisville, KY, July 26, 2007 – At today’s annual meeting, Brown-Forman Corporation stockholders celebrated the nearly 40-year career of company Chairman Owsley Brown II, who is retiring from executive service on September 30. Brown, who joined Brown-Forman as assistant treasurer in 1968, has been chairman since 1995 and also served as chief executive officer from 1993 to 2005.
Brown-Forman President and Chief Executive Officer Paul Varga, who becomes chairman of the corporation on August 1, lauded Brown’s tenure. “Under Owsley Brown’s leadership and direction, Brown-Forman has been transformed into a truly global enterprise,” stated Varga. “More importantly, he has positioned our company for continued growth and prosperity in the future.”
When Brown became CEO in 1993, only 22% of the company’s net sales revenue was derived from outside the U.S. Today, 47% of the revenue comes from international markets, even as the company’s business in the U.S. has continued to show healthy gains. During Brown’s tenure as head of the company, Jack Daniel’s depletions have more than doubled, to over nine million cases, as the brand is now sold in more than 135 countries across the globe.
An even broader measure of Brown’s successful leadership is indicated by the company’s earnings growth. Brown-Forman’s earnings from continuing operations grew from $0.83 per share in fiscal 1993 to $3.22 per share in fiscal 2007, a compound annual growth rate of 10%.
Brown-Forman shareholders also applauded the company’s record earnings of $3.22 per share from continuing operations for the fiscal year ended April 30, 2007, driven by continued volume growth and margin improvement from the company’s premium brands. Diluted earnings per share from continuing operations for the full year were up 1% on a reported basis and 11% on an underlying basis. Over the past three years, the company achieved an underlying compound growth rate of 12% in EPS, on a comparable basis, surpassing the company’s estimated organic growth rate of 7% for the industry.
Owsley Brown told shareholders that he is leaving the company in good hands. “I have great confidence in Paul Varga, an exceptional leader with more than 20 years at Brown-Forman. Paul and his superb team are committed to delivering excellent long-term growth of our company for the benefit of our shareholders.
“I also know that when Garvin Brown IV, another of our outstanding young leaders, becomes Presiding Chairman of our Board of Directors in September, he will have great success in helping shape and facilitate the variety of important activities our strong Board undertakes to ensure our long-term prosperity,” said Owsley Brown.
Brown-Forman re-elected the following people to its Board of Directors: Owsley Brown II, Paul C. Varga, Patrick Bousquet-Chavanne, Barry D. Bramley, Geo. Garvin Brown IV, Martin S. Brown, Jr., Donald G. Calder, Sandra A. Frazier, Richard P. Mayer, William E. Mitchell, Matthew R. Simmons, William M. Street, Dace Brown Stubbs, and James S. Welch, Jr.
At its meeting, the Board of Directors approved a regular quarterly cash dividend of 30.25 cents per share on Class A and Class B Common Stock. Stockholders of record on September 4, 2007, will receive the cash dividend on October 1, 2007. Brown-Forman has paid regular quarterly cash dividends for 62 consecutive years.
Brown-Forman Corporation is a diversified producer and marketer of fine quality beverage alcohol brands, including Jack Daniel’s, Canadian Mist, Southern Comfort, Finlandia Vodkas, Herradura and el Jimador tequilas, 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 a significant portion of our
• lower consumer confidence or purchasing in the wake of higher energy prices or catastrophic events;
• 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
• a strengthening U.S. dollar against foreign currencies, especially the British Pound, Euro, Australian Dollar, and the
• reduced bar, restaurant, hotel and travel business, including travel retail, in the wake of terrorist attacks;
• lower consumer confidence or purchasing associated with high energy prices;
• 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
• increases in the price of energy or raw materials, including grapes, grain, 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 included in our portfolio;
• counterfeit production of our products and any resulting negative effect on our intellectual property rights or brand
• adverse developments as a result of state or federal investigations of beverage alcohol industry trade practices of
suppliers, distributors and retailers.