Includes Stock Split and Special
Dividend
Brown-Forman (NYSE:BFA) (NYSE:BFB) announced today that its
Board of Directors has approved a number of capital deployment
actions aimed at benefiting shareholders, employees, and the
community. These actions include a stock split and a special
dividend, as well as additional funding of the company’s defined
benefit program and the creation of a charitable foundation.
Paul Varga, Chief Executive Officer of Brown-Forman, said,
"These capital deployment actions underscore the strength of the
company’s balance sheet and health of our business, and are
augmented by the anticipated benefits due to tax reform. We believe
the last many years of significant capital investment and portfolio
reshaping have helped position our company for a continuation of
the comprehensively strong results that Brown-Forman has
historically enjoyed. Today’s announcement is reflective of the
breadth and balance of stakeholder value we strive to create over
time."
The stock split will be effected in the form of a dividend on
both Class A and Class B common stock, payable in shares of Class B
common stock. For every four shares of either Class A or Class B
common stock held, shareholders of record as of the close of
business on February 7, 2018 will receive one share of Class B
common stock, with any fractional shares payable in cash. The
additional shares and cash for fractional shares will be
distributed to stockholders on February 28, 2018. Any future cash
dividend declared will reflect the greater number of shares
outstanding after. In addition, all per-share amounts in the
company's subsequent financial statements will reflect the stock
split.
This will be the 14th stock split since the company’s listing in
1934. Assuming there had been no splits over that time period, one
share of Class B common stock would be worth approximately $189,000
today.
The company also declared a special dividend of $1.00 on its
Class A and Class B common stock, which will be paid to
stockholders of record on April 2, 2018 and they will receive the
cash dividend on April 23, 2018. This equates to roughly $480
million after the implementation of the stock split.
The company has also decided to fully fund its current pension
liability of $120 million, further strengthening an important
employee retirement benefit. Additionally, with the goal of helping
to fund the company’s ongoing philanthropic endeavors in the
communities where Brown-Forman employees live and work, the company
is pursuing the creation of a foundation with a contribution of
$60-$70 million. The company anticipates that the foundation’s
proceeds will provide a consistent amount of revenue per year for
its charitable giving program independent of the company’s yearly
earnings.
Brown-Forman’s Board of Directors also declared a regular
quarterly cash dividend of 15 4/5 cents per share on its Class A
and Class B common stock, reflective of the planned five for four
stock split. Stockholders of record on March 5, 2018 will receive
the cash dividend on April 2, 2018.
Referencing the impact of tax reform, Varga added, “As is
customary for Brown-Forman, we will provide an updated perspective
on fiscal year 2018 with the release of third quarter results in
early March, and this update will incorporate the estimated impact
of tax reform on an ongoing basis.”
For almost 150 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 & Cola, Jack Daniel’s Tennessee Honey, Jack Daniel’s
Tennessee Fire, Gentleman Jack, Jack Daniel’s Single Barrel,
Finlandia, Korbel, el Jimador, Woodford Reserve, Old Forester,
Canadian Mist, Herradura, New Mix, Sonoma-Cutrer, Early Times,
Chambord, BenRiach, GlenDronach and Slane. Brown-Forman’s brands
are supported by nearly 4,700 employees and sold in more than 165
countries worldwide. Brown-Forman was recently recognized in the
WSJ Management Top 250 List as the 37th highest rated company for
employee engagement, customer satisfaction, innovation, social
responsibility and financial strength. For more information about
the company, please visit http://www.brown-forman.com/.
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,” 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
uncertainties include, but are not limited to:
- Unfavorable global or regional economic
conditions, and related low consumer confidence, high unemployment,
weak credit or capital markets, budget deficits, burdensome
government debt, austerity measures, higher interest rates, higher
taxes, 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, particularly a stronger U.S. dollar
- Changes in laws, regulations, or
policies - especially those that affect the production,
importation, marketing, labeling, pricing, distribution, 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 (for example, 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 larger
producers in favor of smaller distilleries or local producers, or
away from brown spirits, our premium products, or spirits
generally, and our ability to anticipate or react to them; bar,
restaurant, travel or other on-premise declines; shifts in
demographic trends; 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, water, raw materials, product
ingredients, 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
- Inadequate protection of our
intellectual property rights
- Product recalls or other product
liability claims; product counterfeiting, tampering, contamination,
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
- Failure to attract or retain key
executive or employee talent
- Our status as a family “controlled
company” under New York Stock Exchange rules
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180123006582/en/
Brown-FormanPhil Lynch, 502-774-7928Vice PresidentDirector
Corporate Communicationsand Public RelationsorJay Koval,
502-774-6903Vice PresidentDirector Investor Relationsand Community
Relations
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