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Brown-Forman Reports Strong First Half Results And Raises Full Year Outlook

Hopland-based wine business sale – Refers to the company’s April 2011 sale of its Hopland, California-based wine business to Viña Concha y Toro S.A., whose brands were retained in the company’s portfolio as agency brands through December 31, 2011. This agency relationships resulted in fiscal 2012 reported net sales of $79 million and $0.03 per diluted share. Included in this sale were the Fetzer winery, bottling facility, and vineyards, as well as the Fetzer brand and other Hopland, California-based wines, including Bonterra, Little Black Dress, Jekel, Five Rivers, Bel Arbor, Coldwater Creek, and Sanctuary. Also included in the sale was a facility in Paso Robles, California.

Estimated net change in distributor inventories – Refers to the estimated financial impact of changes in distributor inventories for the company’s brands. Brown-Forman computes this effect using estimated depletion trends and separately identifying trade inventory changes in the variance analysis for key measures. Based on the estimated depletions and the fluctuations in distributor inventory levels, the company then adjusts the percentage variances from prior to current periods for our key measures. Brown-Forman believes it is important to make this adjustment in order for management and investors to understand the results of the business without distortions that can arise from varying levels of distributor inventories.

Dispute settlement – Refers to the favorable resolution of a dispute in an international market relating to the importation of our products. Management believes that excluding this benefit provides helpful information in forecasting and planning the growth expectations of the company.

The company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the company’s reported GAAP results.
 

Schedule B

Brown-Forman Corporation Supplemental Information (Unaudited) Six Months Ended October 31, 2012
    % Change vs. YTD FY12

Depletions 1
   

Net Sales 2

Brand
   

9-Liter
   

Equivalent Conversion
   

Reported
   

Constant Currency
Jack Daniel’s Family     6 %     6 %     6 %     9 %

Jack Daniel’s Family of Whiskey Brands 3
    7 %     7 %     7 %     10 %

Jack Daniel’s RTD/RTP 4
    5 %     5 %     1 %     5 %
el Jimador Family     (1 %)     (1 %)     1 %     6 %
el Jimador     (2 %)     (2 %)     2 %     5 %

New Mix RTD 5
    0 %     0 %     0 %     7 %
Finlandia Family     10 %     8 %     1 %     9 %
Finlandia     7 %     7 %     (1 %)     8 %
Finlandia RTD     69 %     69 %     69 %     88 %
Southern Comfort Family     (4 %)     (2 %)     (7 %)     (5 %)

Southern Comfort 6
    (2 %)     (2 %)     (6 %)     (4 %)
Southern Comfort RTD/RTP     (14 %)     (14 %)     (17 %)     (16 %)
Canadian Mist     (2 %)     (2 %)     4 %     4 %
Korbel Champagne     4 %     4 %     13 %     13 %

Super-Premium Other 7
    9 %     9 %     15 %     17 %

Rest of Brand Portfolio(excl. Discontinued Brands)
    17 %     17 %     13 %     19 %
Total Portfolio 8     5 %     5 %     6 %     9 %

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

3 Jack Daniel’s brand family excluding RTD/RTP line extensions

4 Refers to all RTD and ready-to-pour (RTP) line extensions of Jack Daniel’s

5 RTD brand produced with el Jimador tequila

6 Includes Southern Comfort, Southern Comfort Reserve, and Southern Comfort flavors

7 Includes Herradura, Woodford Reserve, Tuaca and Chambord liqueur and flavored vodka

8 Total Portfolio includes all existing active brands
 

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