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Brown-Forman Sales Growth Continues; On Track For 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., which remained as agency brands through December 31, 2011. 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 trade inventories” refers to the estimated financial impact of changes in distributor inventories for our brands. We calculate this impact using depletion information provided to us by our distributors to estimate the effect of distributor inventory changes on changes in our key measures. We believe that separately identifying the impact of this item presents a more accurate picture of underlying demand for our business.

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)

Three Months Ended July 31, 2013
 
% Change vs. YTD FY13

Depletions 1
 

Net Sales 2
  Equivalent    

Constant
 

Brand
   

9-Liter
 

Conversion 3
 

Reported
 

Currency
 

Underlying
                       
Jack Daniel’s Family     3%   4%  

3%
  4%   7%

Jack Daniel’s Family of Whiskey Brands 4
    4%   4%   4%   4%   7%

Jack Daniel’s RTD/RTP 5
    1%   1%   0%   7%   5%
el Jimador Family     (36%)   (14%)   (17%)   (20%)   (13%)
el Jimador     (1%)   (1%)   (8%)   (10%)   2%

New Mix RTD 6
    (44%)   (44%)   (33%)   (38%)   (38%)
Finlandia Family     4%   3%   (5%)   (7%)   1%
Finlandia     3%   3%   (5%)   (7%)   1%
Finlandia RTD     14%   14%   18%   12%   11%
Southern Comfort Family     (4%)   (4%)   (5%)   (4%)   (2%)

Southern Comfort 7
    (5%)   (5%)   (5%)   (4%)   (2%)
Southern Comfort RTD/RTP     (1%)   (1%)   (12%)   2%   (4%)
Canadian Mist     5%   5%   3%   3%   5%
Korbel Champagne     24%   24%   45%   45%   27%

Super-Premium Other 8
    0%   0%   3%   3%   4%

Rest of Brand Portfolio(excl. Discontinued Brands)
    (10%)  

(10%)
  (3%)   (3%)   (1%)

Total Brand Portfolio
    (3%)   1%   2%   2%   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.  Constant currency change is a non-GAAP measure that represents the percentage change in financial results reported in accordance with GAAP, but with the impact of foreign currency fluctuations removed.  Underlying change is a non-GAAP measure that represents constant currency change further adjusted for items that we believe do not reflect the underlying performance of our business.  To calculate underlying change for the first quarter of fiscal 2014, we adjust constant currency change for estimated net changes in trade inventories.  Please see the Notes to Schedule A of 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
 
 
 

3 Equivalent conversion depletions represent the conversion of ready-to-drink (RTD) brands to a similar drinks equivalent as the parent brand for various trademark families. RTD volume is divided by 10

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

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

6 RTD brand produced with el Jimador tequila

7 Includes Southern Comfort, Southern Comfort Reserve, and Southern Comfort flavors

8 Includes Sonoma-Cutrer, Herradura, Woodford Reserve Family, Tuaca Family and Chambord liqueur and flavored vodka

 

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