10-K 1 bfb-2019430x10kapril.htm 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
| |
|---|
| |
| (Mark One) | |
| þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended April 30, 2019 |
| OR | |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
Commission File Number 001-00123
BROWN-FORMAN CORPORATION
(Exact name of registrant as specified in its charter)
| | |
|---|
| | |
| Delaware | | 61-0143150 |
| (State or other jurisdiction of incorporation or organization) | | (IRS Employer Identification No.) |
| 850 Dixie Highway Louisville, Kentucky | | 40210 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code (502) 585-1100
Securities registered pursuant to Section 12(b) of the Act:
| | |
|---|
| | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Class A Common Stock (voting) $0.15 par value | BFA | New York Stock Exchange |
| Class B Common Stock (nonvoting) $0.15 par value | BFB | New York Stock Exchange |
| 1.200% Notes due 2026 | BF26 | New York Stock Exchange |
| 2.600% Notes due 2028 | BF28 | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | |
|---|
| | | | |
| Large accelerated filer | þ | | Accelerated filer | ¨ |
| Non-accelerated filer | ¨ | | Smaller reporting company | ¨ |
| | | Emerging growth company | ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ
The aggregate market value, as of the last business day of the most recently completed second fiscal quarter, of the voting and nonvoting equity held by nonaffiliates of the registrant was approximately $16,000,000,000.
The number of shares outstanding for each of the registrant’s classes of Common Stock on May 31, 2019, was:
| | |
|---|
| | |
| Class A Common Stock (voting) | 168,985,878 | |
| Class B Common Stock (nonvoting) | 308,288,977 | |
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement of Registrant for use in connection with the Annual Meeting of Stockholders to be held July 25, 2019, are incorporated by reference into Part III of this report.
Forward-Looking Statement Information. Certain matters discussed in this report, including the information presented in Part II under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contain statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectation,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “pursue,” “see,” “seek,” “should,” “will,” “would,” and similar words indicate 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, those described in Part I under “Item 1A. Risk Factors” and those described from time to time in our future reports filed with the Securities and Exchange Commission, including:
| |
|---|
| • | 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, including additional retaliatory tariffs on American spirits and the effectiveness of our actions to mitigate the negative impact on our margins, sales, and distributors; 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, or capital gains) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur |
| |
|---|
| • | The impact of U.S. tax reform legislation, including as a result of future clarifications and guidance interpreting the statute |
| |
|---|
| • | 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 small distilleries or local producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; legalization of marijuana use on a more widespread basis; shifts in consumer purchase practices from traditional to e-commerce retailers; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation |
| |
|---|
| • | Decline in the social acceptability of beverage alcohol 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 fixed costs |
| |
|---|
| • | Inventory fluctuations in our products by distributors, wholesalers, or retailers |
| |
|---|
| • | Competitors’ and retailers’ 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, 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 quality issues |
| |
|---|
| • | Significant legal disputes and proceedings, or government investigations |
| |
|---|
| • | 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, and our dual-class share structure |
Use of Non-GAAP Financial Information. Certain matters discussed in this report, including the information presented in Part II under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” include measures that are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP, and also may be inconsistent with similarly titled measures presented by other companies. In Part II under “Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” we present the reasons we use these measures under the heading “Non-GAAP Financial Measures,” and we reconcile these measures to the most closely comparable GAAP measures under the heading “Results of Operations – Year-Over-Year Comparisons.”
PART I
filings.tools