10-Q

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2021

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 No. 001-00123

Brown-Forman Corporation

(Exact name of Registrant as specified in its Charter)

Delaware		61-0143150
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)
850 Dixie Highway
Louisville,	Kentucky	40210
(Address of principal executive offices)		(Zip Code)

(502) 585-1100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

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 o

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 o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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	☑	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 Exchange Act).

Yes  ☐   No  ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: February 28, 2021

Class A Common Stock (voting), $0.15 par value	169,109,992
Class B Common Stock (nonvoting), $0.15 par value	309,585,407

BROWN-FORMAN CORPORATION
Index to Quarterly Report Form 10-Q
		Page
PART I - FINANCIAL INFORMATION		3
Item 1.	Financial Statements (Unaudited)	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	35
PART II - OTHER INFORMATION		36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36
SIGNATURES		37

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in millions, except per share amounts)

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
	2020		2021		2020		2021
Sales	$	1,178	$	1,222	$	3,404	$	3,481
Excise taxes	279		311		750		832
Net sales	899		911		2,654		2,649
Cost of sales	342		361		980		1,053
Gross profit	557		550		1,674		1,596
Advertising expenses	104		121		308		278
Selling, general, and administrative expenses	153		157		475		460
Gain on sale of business	—		—		—		(127)
Other expense (income), net	(4)		(9)		(13)		(13)
Operating income	304		281		904		998
Non-operating postretirement expense	1		1		3		4
Interest income	(1)		—		(4)		(1)
Interest expense	20		21		62		61
Income before income taxes	284		259		843		934
Income taxes	53		40		144		151
Net income	$	231	$	219	$	699	$	783
Earnings per share:
Basic	$	0.48	$	0.46	$	1.46	$	1.64
Diluted	$	0.48	$	0.45	$	1.45	$	1.63

See notes to the condensed consolidated financial statements.

3

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in millions)

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
	2020		2021		2020		2021
Net income	$	231	$	219	$	699	$	783
Other comprehensive income (loss), net of tax:
Currency translation adjustments	6		47		3		113
Cash flow hedge adjustments	(1)		(33)		1		(72)
Postretirement benefits adjustments	3		5		10		17
Net other comprehensive income (loss)	8		19		14		58
Comprehensive income	$	239	$	238	$	713	$	841

See notes to the condensed consolidated financial statements.

4

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in millions)

	April 30, 2020		January 31, 2021
Assets
Cash and cash equivalents	$	675	$	1,106
Accounts receivable, less allowance for doubtful accounts of $11 at April 30 and $10 at January 31	570		820
Inventories:
Barreled whiskey	1,092		1,090
Finished goods	320		306
Work in process	172		200
Raw materials and supplies	101		127
Total inventories	1,685		1,723
Other current assets	335		265
Total current assets	3,265		3,914
Property, plant and equipment, net	848		826
Goodwill	756		774
Other intangible assets	635		676
Deferred tax assets	15		68
Other assets	247		237
Total assets	$	5,766	$	6,495
Liabilities
Accounts payable and accrued expenses	$	517	$	603
Dividends payable	—		86
Accrued income taxes	30		43
Short-term borrowings	333		312
Total current liabilities	880		1,044
Long-term debt	2,269		2,347
Deferred tax liabilities	177		146
Accrued pension and other postretirement benefits	297		296
Other liabilities	168		194
Total liabilities	3,791		4,027
Commitments and contingencies
Stockholders’ Equity
Common stock:
Class A, voting, $0.15 par value (170,000,000 shares authorized; 170,000,000 shares issued)	25		25
Class B, nonvoting, $0.15 par value (400,000,000 shares authorized; 314,532,000 shares issued)	47		47
Retained earnings	2,708		3,125
Accumulated other comprehensive income (loss), net of tax	(547)		(489)
Treasury stock, at cost (6,323,000 and 5,880,000 shares at April 30 and January 31, respectively)	(258)		(240)
Total stockholders’ equity	1,975		2,468
Total liabilities and stockholders’ equity	$	5,766	$	6,495

 See notes to the condensed consolidated financial statements.

5

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in millions)

	Nine Months Ended
	January 31,
	2020		2021
Cash flows from operating activities:
Net income	$	699	$	783
Adjustments to reconcile net income to net cash provided by operations:
Gain on sale of business	—		(127)
Depreciation and amortization	55		58
Stock-based compensation expense	8		9
Deferred income tax provision (benefit)	30		(56)
Other, net	6		(15)
Changes in assets and liabilities, net of business acquisitions and dispositions:
Accounts receivable	(125)		(219)
Inventories	(142)		(14)
Other current assets	(33)		30
Accounts payable and accrued expenses	(6)		68
Accrued income taxes	10		16
Other operating assets and liabilities	7		39
Cash provided by operating activities	509		572
Cash flows from investing activities:
Proceeds from sale of business	—		177
Acquisition of business, net of cash acquired	(22)		(14)
Additions to property, plant, and equipment	(84)		(41)
Computer software expenditures	(5)		(2)
Cash provided by (used for) investing activities	(111)		120
Cash flows from financing activities:
Proceeds from short-term borrowings, maturities greater than 90 days	—		344
Repayments of short-term borrowings, maturities greater than 90 days	—		(342)
Net change in short-term borrowings, maturities of 90 days or less	(150)		(25)
Payments of withholding taxes related to stock-based awards	(33)		(18)
Acquisition of treasury stock	(1)		—
Dividends paid	(242)		(253)
Cash used for financing activities	(426)		(294)
Effect of exchange rate changes on cash and cash equivalents	(3)		33
Net increase (decrease) in cash and cash equivalents	(31)		431
Cash and cash equivalents, beginning of period	307		675
Cash and cash equivalents, end of period	$	276	$	1,106

See notes to the condensed consolidated financial statements.

6

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In these notes, “we,” “us,” “our,” “Brown-Forman,” and the “Company” refer to Brown-Forman Corporation and its consolidated subsidiaries, collectively.

1.    Condensed Consolidated Financial Statements 

We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. In accordance with those rules and regulations, we condensed or omitted certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). In our opinion, the accompanying financial statements include all adjustments, consisting only of normal recurring adjustments (unless otherwise indicated), necessary for a fair statement of our financial results for the periods presented in these financial statements. The results for interim periods are not necessarily indicative of future or annual results.

We suggest that you read these condensed financial statements together with the financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2020, as amended (2020 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our 2020 Form 10-K.

2.    Earnings Per Share 

We calculate basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share further includes the dilutive effect of stock-based compensation awards. We calculate that dilutive effect using the “treasury stock method” (as defined by GAAP).

The following table presents information concerning basic and diluted earnings per share:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions, except per share amounts)	2020		2021		2020		2021
Net income available to common stockholders	$	231	$	219	$	699	$	783
Share data (in thousands):
Basic average common shares outstanding	477,898		478,599		477,643		478,471
Dilutive effect of stock-based awards	2,859		2,237		2,793		2,194
Diluted average common shares outstanding	480,757		480,836		480,436		480,665
Basic earnings per share	$	0.48	$	0.46	$	1.46	$	1.64
Diluted earnings per share	$	0.48	$	0.45	$	1.45	$	1.63

We excluded common stock-based awards for approximately 0 shares and 298,000 shares from the calculation of diluted earnings per share for the three months ended January 31, 2020 and 2021, respectively. We excluded common stock-based awards for approximately 295,000 shares and 211,000 shares from the calculation of diluted earnings per share for the nine months ended January 31, 2020 and 2021, respectively. We excluded those awards because they were not dilutive for those periods under the treasury stock method.

3.    Inventories

Inventories are valued at the lower of cost or net realizable value. Some of our consolidated inventories are valued using the last-in, first-out (LIFO) method, which we use for the majority of our U.S. inventories. If the LIFO method had not been used, inventories at current cost would have been $311 million higher than reported as of April 30, 2020, and $342 million higher than reported as of January 31, 2021. Changes in the LIFO valuation reserve for interim periods are based on an allocation of the projected change for the entire fiscal year, recognized proportionately over the remainder of the fiscal year.

7

4.    Goodwill and Other Intangible Assets

The following table shows the changes in goodwill (which includes no accumulated impairment losses) and other intangible assets during the nine months ended January 31, 2021:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2020	$	756	$	635
Sale of business (Note 14)	(4)		(1)
Acquisition (Note 14)	6		8
Foreign currency translation adjustment	16		34
Balance at January 31, 2021	$	774	$	676

Our other intangible assets consist of trademarks and brand names, all with indefinite useful lives.

5.    Commitments and Contingencies

We operate in a litigious environment, and we are sued in the normal course of business. Sometimes plaintiffs seek substantial damages. Significant judgment is required in predicting the outcome of these suits and claims, many of which take years to adjudicate. We accrue estimated costs for a contingency when we believe that a loss is probable and we can make a reasonable estimate of the loss, and then adjust the accrual as appropriate to reflect changes in facts and circumstances. We do not believe it is reasonably possible that these existing loss contingencies, individually or in the aggregate, would have a material adverse effect on our financial position, results of operations, or liquidity. No material accrued loss contingencies were recorded as of January 31, 2021.

We have guaranteed the repayment by a third-party importer of its obligation under a bank credit facility that it uses in connection with its importation of our products in Russia. If the importer were to default on that obligation, which we believe is unlikely, our maximum possible exposure under the existing terms of the guaranty would be approximately $9 million (subject to changes in foreign currency exchange rates). Both the fair value and carrying amount of the guaranty are insignificant. As of January 31, 2021, our actual exposure under the guaranty of the importer’s obligation was approximately $6 million. We also have accounts receivable from that importer of approximately $10 million at January 31, 2021, which we expect to collect in full. Based on the financial support we provide to the importer, we believe it meets the definition of a variable interest entity. However, because we do not control this entity, it is not included in our consolidated financial statements.

On May 30, 2019, we notified Bacardi Martini Ltd. (Bacardi) of our intention not to renew the terms of our United Kingdom (U.K.) Cost Sharing Agreement (the Agreement) whereby Bacardi provided certain services (e.g., warehousing and logistics, sales, reporting, treasury, tax, and other services) and Brown-Forman and Bacardi split the associated overhead for those services. For purposes of conducting business, Brown-Forman and Bacardi established a U.K. trade name, “Bacardi Brown-Forman Brands,” through which our products and Bacardi’s products were sold in the U.K. On a monthly basis, Bacardi would remit to us the cash representing revenues from sales of our products, net of our agreed contributions for overhead costs under the Agreement. On April 30, 2020, the Agreement expired according to its terms.

Following delivery of our notice and upon expiration of the Agreement, Bacardi alleged that it was entitled to approximately £49 million under the principle of commercial agency in the U.K., as well as additional compensation for the winding up of business conducted under the Agreement and for remitting the associated funds owed to us. From monthly settlements following the expiration of the Agreement, Bacardi withheld over £50 million owed to us, effectively bypassing the dispute resolution process under the Agreement.

In response to Bacardi’s actions, we initiated a lawsuit on August 20, 2020, in the Commercial Court in the U.K. seeking reimbursement of the amounts wrongfully withheld. Shortly thereafter, Bacardi filed a demand for arbitration seeking a determination that it was entitled to compensation as a commercial agent and for additional compensation for the work completed following the expiration of the Agreement.

Since it was raised, we have disputed Bacardi’s claim of commercial agency compensation and issued demands that Bacardi adhere to the dispute resolution process mandated by the Agreement and return the over £50 million that Bacardi has wrongfully withheld from us. Given the early stages of the litigation and arbitration process, we are unable to estimate the range of reasonably possible loss, if any. The withheld amount is included in accounts receivable in the accompanying condensed consolidated balance sheet as of January 31, 2021.

8

6.    Debt

Our long-term debt (net of unamortized discount and issuance costs) consists of:

(Principal and carrying amounts in millions)	April 30, 2020		January 31, 2021
2.250% senior notes, $250 principal amount, due January 15, 2023	$	249	$	249
3.500% senior notes, $300 principal amount, due April 15, 2025	297		298
1.200% senior notes, €300 principal amount, due July 7, 2026	324		362
2.600% senior notes, £300 principal amount, due July 7, 2028	369		408
4.000% senior notes, $300 principal amount, due April 15, 2038	294		294
3.750% senior notes, $250 principal amount, due January 15, 2043	248		248
4.500% senior notes, $500 principal amount, due July 15, 2045	488		488
	$	2,269	$	2,347

Our short-term borrowings of $333 million as of April 30, 2020, and $312 million as of January 31, 2021, consisted primarily of borrowings under our commercial paper program.

(Dollars in millions)	April 30, 2020	January 31, 2021
Commercial paper	$333	$290
Average interest rate	1.29%	0.27%
Average remaining days to maturity	73	33

9

7.    Stockholders’ Equity

The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 31, 2020:

(Dollars in millions)	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital		Retained Earnings		AOCI		Treasury Stock		Total
Balance at April 30, 2019	$	25	$	47	$	—	$	2,238	$	(363)	$	(300)	$	1,647
Adoption of ASU 2018-02							43		(43)				—
Net income							186						186
Net other comprehensive income (loss)									(1)				(1)
Declaration of cash dividends							(158)						(158)
Acquisition of treasury stock											(1)		(1)
Stock-based compensation expense					3								3
Stock issued under compensation plans											16		16
Loss on issuance of treasury stock issued under compensation plans					(2)		(27)						(29)
Balance at July 31, 2019	25		47		1		2,282		(407)		(285)		1,663
Net income							282						282
Net other comprehensive income (loss)									7				7
Stock-based compensation expense					3								3
Stock issued under compensation plans											11		11
Loss on issuance of treasury stock issued under compensation plans					(4)		(20)						(24)
Balance at October 31, 2019	25		47		—		2,544		(400)		(274)		1,942
Net income							231						231
Net other comprehensive income (loss)									8				8
Declaration of cash dividends							(167)						(167)
Stock-based compensation expense					2								2
Stock issued under compensation plans											11		11
Loss on issuance of treasury stock issued under compensation plans					(2)		(20)						(22)
Balance at January 31, 2020	$	25	$	47	$	—	$	2,588	$	(392)	$	(263)	$	2,005

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The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 31, 2021:

(Dollars in millions)	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital		Retained Earnings		AOCI		Treasury Stock		Total
Balance at April 30, 2020	$	25	$	47	$	—	$	2,708	$	(547)	$	(258)	$	1,975
Net income							324						324
Net other comprehensive income (loss)									24				24
Declaration of cash dividends							(167)						(167)
Stock-based compensation expense					3								3
Stock issued under compensation plans											10		10
Loss on issuance of treasury stock issued under compensation plans					(3)		(16)						(19)
Balance at July 31, 2020	25		47		—		2,849		(523)		(248)		2,150
Net income							240						240
Net other comprehensive income (loss)									15				15
Stock-based compensation expense					3								3
Stock issued under compensation plans											5		5
Loss on issuance of treasury stock issued under compensation plans					(3)		(7)						(10)
Balance at October 31, 2020	25		47		—		3,082		(508)		(243)		2,403
Net income							219						219
Net other comprehensive income (loss)									19				19
Declaration of cash dividends							(172)						(172)
Stock-based compensation expense					3								3
Stock issued under compensation plans											3		3
Loss on issuance of treasury stock issued under compensation plans					(3)		(4)						(7)
Balance at January 31, 2021	$	25	$	47	$	—	$	3,125	$	(489)	$	(240)	$	2,468

The following table shows the change in each component of accumulated other comprehensive income (AOCI), net of tax, during the nine months ended January 31, 2021:

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2020	$	(302)	$	60	$	(305)	$	(547)
Net other comprehensive income (loss)	113		(72)		17		58
Balance at January 31, 2021	$	(189)	$	(12)	$	(288)	$	(489)

The following table shows the cash dividends declared per share on our Class A and Class B common stock during the nine months ended January 31, 2021:

Declaration Date	Record Date	Payable Date	Amount per Share
May 21, 2020	June 8, 2020	July 1, 2020	$0.1743
July 23, 2020	September 4, 2020	October 1, 2020	$0.1743
November 19, 2020	December 4, 2020	January 4, 2021	$0.1795
January 27, 2021	March 8, 2021	April 1, 2021	$0.1795

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8.    Net Sales 

The following table shows our net sales by geography:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
United States	$	416	$	425	$	1,296	$	1,334
Developed International1	263		292		716		789
Emerging2	171		171		477		438
Travel Retail3	34		12		104		47
Non-branded and bulk4	15		11		61		41
Total	$	899	$	911	$	2,654	$	2,649

1Represents net sales of branded products to “advanced economies” as defined by the International Monetary Fund (IMF), excluding the United States. Our largest developed international markets are the United Kingdom, Germany, Australia, and France.

2Represents net sales of branded products to “emerging and developing economies” as defined by the IMF. Our largest emerging markets are Mexico, Poland, and Russia.

3Represents net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military regardless of customer location.

4Includes net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

The following table shows our net sales by product category:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
Whiskey1	$	701	$	731	$	2,086	$	2,101
Tequila2	74		72		219		224
Wine3	62		50		159		162
Vodka4	32		26		89		71
Rest of portfolio	15		21		40		50
Non-branded and bulk5	15		11		61		41
Total	$	899	$	911	$	2,654	$	2,649

1Includes all whiskey spirits and whiskey-based flavored liqueurs, ready-to-drink, and ready-to-pour products. The brands included in this category are the Jack Daniel's family of brands, the Woodford Reserve family of brands, the Old Forester family of brands, GlenDronach, BenRiach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft. Also includes the Early Times, Canadian Mist, and Collingwood brands, which we divested on July 31, 2020 (Note 14).

2Includes el Jimador, the Herradura family of brands, New Mix, Pepe Lopez, and Antiguo.

3Includes Korbel Champagnes and Sonoma-Cutrer wines.

4Includes Finlandia.

5Includes net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

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9.    Pension and Other Postretirement Benefits

The following table shows the components of the net cost of pension and other postretirement benefits recognized for our U.S. benefit plans. Information about similar international plans is not presented due to immateriality.

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
Pension Benefits:
Service cost	$	6	$	7	$	18	$	20
Interest cost	8		6		24		19
Expected return on plan assets	(12)		(12)		(35)		(35)
Amortization of:
Prior service cost (credit)	—		—		1		1
Net actuarial loss	5		7		14		20
Net cost	$	7	$	8	$	22	$	25
Other Postretirement Benefits:
Service cost	$	—	$	—	$	1	$	1
Interest cost	1		1		1		1
Amortization of prior service cost (credit)	(1)		(1)		(2)		(2)
Net cost	$	—	$	—	$	—	$	—

10.    Income Taxes

Our consolidated interim effective tax rate is based on our expected annual operating income, statutory tax rates, and income tax laws in the various jurisdictions where we operate. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the fiscal quarter in which the related event or a change in judgment occurs. The effective tax rate for the three months ended January 31, 2021, was 15.7% compared to 18.6% for the same period last year. The decrease in our effective tax rate for the three months ended January 31, 2021, was driven primarily by a deferred tax benefit related to a statutory rate change and an increase in the foreign derived intangible income deduction. The effective tax rate for the nine months ended January 31, 2021, was 16.2% compared to 17.1% for the same period last year. The decrease in our effective tax rate for the nine months ended January 31, 2021, was driven primarily by a deferred tax benefit related to an intercompany transfer of assets partially offset by (a) less stock-based compensation deduction, (b) a decreased benefit in the foreign derived intangible income deduction, and (c) a lower prior-year true-up benefit.

We have asserted that the undistributed earnings of the majority of our foreign subsidiaries are reinvested indefinitely outside the United States. Therefore, no income taxes have been provided for any outside basis differences inherent in these subsidiaries other than those subject to the one-time repatriation tax. We have a limited number of subsidiaries that are not permanently reinvested and therefore we have recorded the deferred tax liability related to the undistributed earnings (but not for their outside basis differences).

11.    Derivative Financial Instruments and Hedging Activities

We are subject to market risks, including the effect of fluctuations in foreign currency exchange rates, commodity prices, and interest rates. We use derivatives to help manage financial exposures that occur in the normal course of business. We formally document the purpose of each derivative contract, which includes linking the contract to the financial exposure it is designed to mitigate. We do not hold or issue derivatives for trading or speculative purposes.

We use currency derivative contracts to limit our exposure to the foreign currency exchange rate risk that we cannot mitigate internally by using netting strategies. We designate most of these contracts as cash flow hedges of forecasted transactions (expected to occur within three years). We record all changes in the fair value of cash flow hedges in AOCI until the underlying hedged transaction occurs, at which time we reclassify that amount into earnings.

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We do not designate some of our currency derivatives as hedges because we use them to partially offset the immediate earnings impact of changes in foreign currency exchange rates on existing assets or liabilities. We immediately recognize the change in fair value of these contracts in earnings.

We had outstanding currency derivatives, related primarily to our euro, British pound, and Australian dollar exposures, with notional amounts for all hedged currencies totaling $1,026 million at April 30, 2020, and $1,092 million at January 31, 2021. The maximum term of outstanding derivative contracts was 36 months at both April 30, 2020, and January 31, 2021.

We also use foreign currency-denominated debt instruments to help manage our foreign currency exchange rate risk. We designate a portion of those debt instruments as net investment hedges, which are intended to mitigate foreign currency exposure related to non-U.S. dollar net investments in certain foreign subsidiaries. Any change in value of the designated portion of the hedging instruments is recorded in AOCI, offsetting the foreign currency translation adjustment of the related net investments that is also recorded in AOCI. The amount of foreign currency-denominated debt instruments designated as net investment hedges was $613 million at April 30, 2020, and $673 million at January 31, 2021.

At inception, we expect each financial instrument designated as a hedge to be highly effective in offsetting the financial exposure it is designed to mitigate. We also assess the effectiveness on an ongoing basis. If determined to no longer be highly effective, designation and accounting for the instrument as a hedge would be discontinued.

We use forward purchase contracts with suppliers to protect against corn price volatility. We expect to take physical delivery of the corn underlying each contract and use it for production over a reasonable period of time. Accordingly, we account for these contracts as normal purchases rather than as derivative instruments.

The following tables present the pre-tax impact that changes in the fair value of our derivative instruments and non-derivative hedging instruments had on AOCI and earnings:

		Three Months Ended
		January 31,
(Dollars in millions)	Classification	2020		2021
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	4	$	(39)
Net gain (loss) reclassified from AOCI into earnings	Sales	5		4
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(1)	$	(6)
Net gain (loss) recognized in earnings	Other income (expense), net	4		4
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(5)	$	(33)
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,178	$	1,222
Other income (expense), net		4		9

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		Nine Months Ended
		January 31,
(Dollars in millions)	Classification	2020		2021
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	17	$	(73)
Net gain (loss) reclassified from AOCI into earnings	Sales	16		21
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(2)	$	(11)
Net gain (loss) recognized in earnings	Other income (expense), net	6		15
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(2)	$	(66)
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	3,404	$	3,481
Other income (expense), net		13		13

We expect to reclassify $9 million of deferred net losses on cash flow hedges recorded in AOCI as of January 31, 2021, to earnings during the next 12 months. This reclassification would offset the anticipated earnings impact of the underlying hedged exposures. The actual amounts that we ultimately reclassify to earnings will depend on the exchange rates in effect when the underlying hedged transactions occur.

The following table presents the fair values of our derivative instruments:

		April 30, 2020				January 31, 2021
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	49	$	(1)	$	7	$	(2)
Currency derivatives	Other assets	30		—		1		—
Currency derivatives	Accrued expenses	—		—		3		(14)
Currency derivatives	Other liabilities	—		—		1		(17)
Not designated as hedges:
Currency derivatives	Other current assets	—		—		—		—
Currency derivatives	Other assets	—		—		—		—
Currency derivatives	Accrued expenses	—		(2)		—		(1)
Currency derivatives	Other liabilities	—		—		—		—

The fair values reflected in the above table are presented on a gross basis. However, as discussed further below, the fair values of those instruments subject to net settlement agreements are presented on a net basis in our balance sheets.

In our statements of cash flows, we classify cash flows related to cash flow hedges in the same category as the cash flows from the hedged items.

Credit risk. We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the contracts. To manage this risk, we contract only with major financial institutions that have earned investment-grade credit ratings and with whom we have standard International Swaps and Derivatives Association (ISDA) agreements that allow for net settlement of the derivative contracts. Also, we have established counterparty credit guidelines that we monitor regularly, and we monetize contracts when we believe it is warranted. Because of these safeguards, we believe we have no derivative positions that warrant credit valuation adjustments.

Some of our derivative instruments require us to maintain a specific level of creditworthiness, which we have maintained. If our creditworthiness were to fall below that level, then the counterparties to our derivative instruments could request immediate

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payment or collateralization for derivative instruments in net liability positions. The aggregate fair value of all derivatives with creditworthiness requirements that were in a net liability position was $2 million at April 30, 2020, and $27 million at January 31, 2021.

Offsetting. As noted above, our derivative contracts are governed by ISDA agreements that allow for net settlement of derivative contracts with the same counterparty. It is our policy to present the fair values of current derivatives (i.e., those with a remaining term of 12 months or less) with the same counterparty on a net basis in our balance sheets. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. We do not net current derivatives with noncurrent derivatives in our balance sheets.

The following table summarizes the gross and net amounts of our derivative contracts:

(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet		Net Amounts
April 30, 2020
Derivative assets	$	79	$	(1)	$	78	$	—	$	78
Derivative liabilities	(3)		1		(2)		—		(2)
January 31, 2021
Derivative assets	12		(6)		6		(1)		5
Derivative liabilities	(34)		6		(28)		1		(27)

No cash collateral was received or pledged related to our derivative contracts as of April 30, 2020, or January 31, 2021.

12.    Fair Value Measurements

The following table summarizes the assets and liabilities measured or disclosed at fair value on a recurring basis:

	April 30, 2020				January 31, 2021
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	675	$	675	$	1,106	$	1,106
Currency derivatives	78		78		6		6
Liabilities
Currency derivatives	2		2		28		28
Short-term borrowings	333		333		312		312
Long-term debt	2,269		2,486		2,347		2,749

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We categorize the fair values of assets and liabilities into three levels based on the assumptions (inputs) used to determine those values. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are:

•Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2 – Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in inactive markets; or other inputs that are observable or can be derived from or corroborated by observable market data.

•Level 3 – Unobservable inputs supported by little or no market activity.

We determine the fair values of our currency derivatives (forward contracts) using standard valuation models. The significant inputs used in these models, which are readily available in public markets or can be derived from observable market transactions, include the applicable spot exchange rates, forward exchange rates, and interest rates. These fair value measurements are categorized as Level 2 within the valuation hierarchy.

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We determine the fair value of long-term debt primarily based on the prices at which identical or similar debt has recently traded in the market and also considering the overall market conditions on the date of valuation. These fair value measurements are categorized as Level 2 within the valuation hierarchy.

The fair values of cash, cash equivalents, and short-term borrowings approximate the carrying amounts due to the short maturities of these instruments.

We measure some assets and liabilities at fair value on a nonrecurring basis. That is, we do not measure them at fair value on an ongoing basis, but we do adjust them to fair value in some circumstances (for example, when we determine that an asset is impaired). No material nonrecurring fair value measurements were required during the periods presented in these financial statements.

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13.    Other Comprehensive Income

The following tables show the components of net other comprehensive income (loss):

	Three Months Ended						Three Months Ended
	January 31, 2020						January 31, 2021
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	5	$	1	$	6	$	39	$	8	$	47
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	5		1		6		39		8		47
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	4		(1)		3		(39)		9		(30)
Reclassification to earnings1	(5)		1		(4)		(4)		1		(3)
Other comprehensive income (loss), net	(1)		—		(1)		(43)		10		(33)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	4		(1)		3		6		(1)		5
Other comprehensive income (loss), net	4		(1)		3		6		(1)		5
Total other comprehensive income (loss), net	$	8	$	—	$	8	$	2	$	17	$	19
	Nine Months Ended						Nine Months Ended
	January 31, 2020						January 31, 2021
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	3	$	—	$	3	$	97	$	16	$	113
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	3		—		3		97		16		113
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	17		(4)		13		(73)		17		(56)
Reclassification to earnings1	(16)		4		(12)		(21)		5		(16)
Other comprehensive income (loss), net	1		—		1		(94)		22		(72)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	13		(3)		10		23		(6)		17
Other comprehensive income (loss), net	13		(3)		10		23		(6)		17
Total other comprehensive income (loss), net	$	17	$	(3)	$	14	$	26	$	32	$	58

1Pre-tax amount for each period is classified as sales in the accompanying condensed consolidated statements of operations.

2For the nine months ended January 31, 2021, $4 of the pre-tax amount of $23 is classified in gain on sale of business in the accompanying condensed consolidated statements of operations. Otherwise, the pre-tax amount for each period is classified as non-operating postretirement expense.

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14.    Acquisitions and Divestitures

On July 31, 2020, we sold the Early Times, Canadian Mist, and Collingwood brands for $177 million in cash. The sale reflects the continued evolution of our portfolio strategy to focus on premium spirits brands. The total book value of the related business assets included in the sale was $50 million, consisting largely of inventories, the Canadian Mist production assets, and intellectual property. As a result of the sale, we recognized a pre-tax gain of $127 million during the first quarter of fiscal 2021.

On December 1, 2020, we acquired 100% of the voting interests in Part Time Rangers Holdings Limited (Part Time Rangers) for $14 million in cash (including repayment of debt). Part Time Rangers, which is based in New Zealand, produces spirits-based ready-to-drink products with all-natural fruit flavoring. The purchase price has been preliminarily allocated largely to the intangible assets of the acquired business, including goodwill of $6 million and other intangible assets of $8 million. The goodwill is primarily attributable to the value of leveraging our distribution network and brand-building expertise to grow sales of the Part Time Rangers brand. We do not expect the goodwill to be deductible for tax purposes. Part Time Rangers has been included in our consolidated financial statements since the acquisition date. Actual and pro forma results are not presented due to immateriality.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with both our unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item 1 of this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended April 30, 2020, as amended (2020 Form 10-K). Note that the results of operations for the nine months ended January 31, 2021, are not necessarily indicative of future or annual results. In this Item, “we,” “us,” “our,” “Brown-Forman,” and the “Company” refer to Brown-Forman Corporation and its consolidated subsidiaries, collectively.

Presentation Basis

Non-GAAP Financial Measures

We use certain financial measures in this report that are not measures of financial performance under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures, defined below, should be viewed as supplements to (not substitutes for) our results of operations and other measures reported under GAAP. Other companies may not define or calculate these non-GAAP measures in the same way.

“Underlying change” in measures of statements of operations. We present changes in certain measures, or line items, of the statements of operations that are adjusted to an “underlying” basis. We use “underlying change” for the following measures of the statements of operations: (a) underlying net sales; (b) underlying cost of sales; (c) underlying gross profit; (d) underlying advertising expenses; (e) underlying selling, general, and administrative (SG&A) expenses; (f) underlying other expense (income), net; (g) underlying operating expenses1; and (h) underlying operating income. To calculate these measures, we adjust, as applicable, for (a) acquisitions and divestitures, (b) foreign exchange, and (c) estimated net change in distributor inventories. We explain these adjustments below.

•“Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction costs and integration costs), and (c) the effects of operating activity related to acquired and divested brands for periods not comparable year over year (non-comparable periods). By excluding non-comparable periods, we therefore include the effects of acquired and divested brands only to the extent that results are comparable year over year.

In fiscal 2020, we acquired The 86 Company, which owns Fords Gin. During the first quarter of fiscal 2021, we sold our Early Times, Canadian Mist, and Collingwood brands and related assets, which resulted in a pre-tax gain of $127 million. During the third quarter of fiscal 2021, we acquired Part Time Rangers Holdings Limited, which owns Part Time Rangers RTDs. See Note 14 to the Condensed Consolidated Financial Statements for details.

This adjustment removes (a) transaction and integration costs related to the acquisitions and divestitures, (b) operating activity for The 86 Company for the non-comparable period, which is activity in the first quarter of fiscal 2021, (c) the gain on sale of Early Times, Canadian Mist, and Collingwood, (d) operating activity for the non-comparable period for Early Times, Canadian Mist, and Collingwood, which is activity in the second and third quarter for both fiscal 2020 and fiscal 2021, and (e) operating activity for Part Time Rangers Holdings Limited for the non-comparable period, which is activity in the third quarter of fiscal 2021. We believe that these adjustments allow for us to better understand our underlying results on a comparable basis.

•“Foreign exchange.” We calculate the percentage change in certain line items of the statements of operations in accordance with GAAP and adjust to exclude the cost or benefit of currency fluctuations. Adjusting for foreign exchange allows us to understand our business on a constant-dollar basis, as fluctuations in exchange rates can distort the underlying trend both positively and negatively. (In this report, “dollar” always means the U.S. dollar unless stated otherwise.) To eliminate the effect of foreign exchange fluctuations when comparing across periods, we translate current-year results at prior-year rates and remove transactional and hedging foreign exchange gains and losses from current- and prior-year periods.

•“Estimated net change in distributor inventories.” This adjustment refers to the estimated net effect of changes in distributor inventories on changes in certain line items of the statements of operations. For each period compared, we use volume (see Definitions - Other Metrics below) information from our distributors to estimate the effect of distributor inventory changes in certain line items of the statements of operations. We believe that this adjustment reduces the effect of varying levels of distributor inventories on changes in certain line items of the statements of operations and allows us to understand better our underlying results and trends.

1Operating expenses include advertising expense, SG&A expense, and other expense (income), net.

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We use the non-GAAP measures “underlying change” to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the board of directors, stockholders, and the investment community. We provide reconciliations of the “underlying change” in certain line items of the statements of operations to their nearest GAAP measures in the tables under “Results of Operations - Year-Over-Year Period Comparisons.” We have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure.

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Definitions

Aggregations.

From time to time, to explain our results of operations or to highlight trends and uncertainties affecting our business, we aggregate markets according to stage of economic development as defined by the International Monetary Fund (IMF), and we aggregate brands by product category. We define our geographic and brand aggregations below.

Geographic Aggregations.

In “Results of Operations - Fiscal 2021 Year-to-Date Highlights,” we provide supplemental information for our largest markets ranked by percentage of total fiscal 2020 net sales. In addition to markets that are listed by country name, we include the following aggregations:

•“Developed International” markets are “advanced economies” as defined by the IMF, excluding the United States. Our largest developed international markets are the United Kingdom, Germany, Australia, and France. This aggregation represents our net sales of branded products to these markets.

•“Emerging” markets are “emerging and developing economies” as defined by the IMF. Our largest emerging markets are Mexico, Poland, and Russia. This aggregation represents our net sales of branded products to these markets.

•“Travel Retail” represents our net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military regardless of customer location.

•“Non-branded and bulk” includes our net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

Brand Aggregations.

In “Results of Operations - Fiscal 2021 Year-to-Date Highlights,” we provide supplemental information for our largest brands ranked by percentage of total fiscal 2020 net sales. In addition to brands that are listed by name, we include the following aggregations:

•“Whiskey” includes all whiskey spirits and whiskey-based flavored liqueurs, ready-to-drink (RTD), and ready-to-pour products (RTP). The brands included in this category are the Jack Daniel’s family of brands, the Woodford Reserve family of brands (Woodford Reserve), the Old Forester family of brands (Old Forester), GlenDronach, BenRiach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft. Also includes the Early Times, Canadian Mist, and Collingwood brands, which we divested on July 31, 2020. See Note 14 to the Condensed Consolidated Financial Statements for details.

•“American whiskey” includes the Jack Daniel’s family of brands, premium bourbons (defined below), super-premium American whiskey (defined below), and Early Times, which we divested on July 31, 2020.

•“Jack Daniel’s family of brands” includes Jack Daniel’s Tennessee Whiskey (JDTW), Jack Daniel’s RTD and RTP products (JD RTD/RTP), Jack Daniel’s Tennessee Honey (JDTH), Gentleman Jack, Jack Daniel’s Tennessee Fire (JDTF), Jack Daniel’s Tennessee Apple (JDTA), Jack Daniel’s Single Barrel Collection (JDSB), Jack Daniel’s Tennessee Rye Whiskey (JDTR), Jack Daniel’s Sinatra Select, Jack Daniel’s No. 27 Gold Tennessee Whiskey, and Jack Daniel’s Bottled-in-Bond.

•“Jack Daniel’s RTD and RTP” products include Jack Daniel’s & Cola, Jack Daniel’s Country Cocktails, Jack Daniel’s & Diet Cola, Jack & Ginger, Jack Daniel’s Double Jack, Gentleman Jack & Cola, Jack Daniel’s Lynchburg Lemonade, Jack Daniel’s American Serve, Jack Daniel’s Tennessee Honey RTD, Jack Daniel’s Berry, Jack Daniel’s Cider, Jack Daniel’s Whiskey & Seltzer, and the seasonal Jack Daniel’s Winter Jack RTP.

•“Premium bourbons” includes Woodford Reserve, Old Forester, and Coopers’ Craft.

•“Super-premium American whiskey” includes Woodford Reserve, Gentleman Jack, JDSB, JDTR, Jack Daniel’s Sinatra Select, and Jack Daniel’s No. 27 Gold Tennessee Whiskey.

•“Tequila” includes el Jimador, the Herradura family of brands (Herradura), New Mix, Pepe Lopez, and Antiguo.

•“Wine” includes Korbel Champagnes and Sonoma-Cutrer wines.

•“Vodka” includes Finlandia.

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•“Non-branded and bulk” includes our net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

Other Metrics.

•“Depletions.” We generally record revenues when we ship our products to our customers. Depletions is a term commonly used in the beverage alcohol industry to describe volume. Depending on the context, depletions means either (a) our shipments directly to retail or wholesale customers for owned distribution markets or (b) shipments from our distributor customers to retailers and wholesalers in other markets. We believe that depletions measure volume in a way that more closely reflects consumer demand than our shipments to distributor customers do. In this document, unless otherwise specified, we refer to depletions when discussing volume.

•“Consumer takeaway.” When discussing trends in the market, we refer to consumer takeaway, a term commonly used in the beverage alcohol industry. Consumer takeaway refers to the purchase of product by consumers from retail outlets, including products purchased through e-premise channels, as measured by volume or retail sales value. This information is provided by third parties, such as Nielsen and the National Alcohol Beverage Control Association (NABCA). Our estimates of market share or changes in market share are derived from consumer takeaway data using the retail sales value metric. We believe consumer takeaway is a leading indicator of how consumer demand is trending.

Important Information on Forward-Looking Statements:

This report 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,” “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:

•Impact of health epidemics and pandemics, including the COVID-19 pandemic, and the resulting negative economic impact and related governmental actions

•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; terrorism; and health pandemics

•Failure to comply with anti-corruption laws, trade sanctions and restrictions, or similar laws or regulations

•Fluctuations in foreign currency exchange rates, particularly a stronger U.S. dollar

•Changes in laws, regulatory measures, or governmental 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

•Unfavorable global or regional economic conditions, particularly related to the COVID-19 pandemic, and related economic slowdowns or recessions, 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

•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

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•Significant additional labeling or warning requirements or limitations on availability of our beverage alcohol products

•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

•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

•Risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination difficulties or costs, or impairment in recorded value

•Counterfeiting and inadequate protection of our intellectual property rights

•Product recalls or other product liability claims, product tampering, contamination, or quality issues

•Significant legal disputes and proceedings, or government investigations

•Cyber breach or failure or corruption of key information technology systems, or failure to comply with personal data protection laws

•Negative publicity related to our company, products, brands, marketing, executive leadership, employees, board of directors, family stockholders, 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

For further information on these and other risks, please see the risks and uncertainties described in Part I, Item 1A. Risk Factors of our 2020 Form 10-K, those described in Part II, Item 1A. Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended July 31, 2020, (First Quarter 2021 Form 10-Q), and those described from time to time in our future reports filed with the Securities and Exchange Commission.

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Overview

COVID-19

The ongoing COVID-19 pandemic continues to impact the global economy and create economic uncertainty even with multiple vaccines in various stages of deployment around the world. Governments around the world have imposed restrictions on travel and business operations and have placed limitations on the size of public and private gatherings of their citizens. As a result of such restrictions, many businesses have either been closed or their operations have been modified. The bar, restaurant, airline, cruise, and related hospitality industries have been particularly impacted as the ability to travel and gather has been severely limited or restricted in various countries around the world.

While the financial impact of COVID-19 on our business for the nine months ended January 31, 2021, is difficult to measure, it has had an effect on our financial performance, both positive and negative. For example, the negative impact continued to be concentrated in (a) the on-premise (representing approximately 20% of our business prior to COVID-19) as a result of the restrictions in the channel, (b) our Travel Retail channel as a result of travel bans and other restrictions, and (c) certain emerging markets where we have seen evidence of consumers trading down from premium spirit categories where our portfolio is focused. Conversely, strong off-premise gains across many of our developed markets, reflecting an increase in at-home consumption and strong growth in the e-premise channel, continued to offset the significant reduction in sales in the negatively affected channels and markets. We further discuss the effect of COVID-19 on our results where relevant below.

We believe we remain in a strong financial position, and our capacity to generate solid operating cash flow remains sound, allowing us to navigate this crisis as circumstances evolve. Additionally, we have no maturities of long-term debt until fiscal 2023. See “Liquidity and Financial Condition” below for details.

Fiscal 2021 Year-to-Date Highlights

•We delivered reported net sales of $2.6 billion, essentially flat compared to the same period last year. Excluding an estimated net decrease in distributor inventories, we grew underlying net sales 2% for the nine months ended January 31, 2021. Net sales for our markets and brands were affected by COVID-19 during the first nine months of fiscal 2021. Underlying growth was driven by (a) JD RTDs; (b) our premium bourbon brands, led by Woodford Reserve and Old Forester; (c) the continued international launch of JDTA; (d) broad-based growth of JDTH; and (e) our tequila brands, fueled by volume growth of New Mix. These gains were partially offset by declines on JDTW in (a) the on-premise (representing approximately 20% of our business prior to COVID-19) as a result of the restrictions in the channel, (b) our Travel Retail channel as a result of travel bans and other restrictions, and (c) certain emerging markets reflecting the lack of tourism and consumers trading down from premium spirit categories. From a geographic perspective, the United States and developed international markets led the underlying net sales growth with certain emerging markets also contributing. These gains were partially offset by a decline in underlying net sales in our Travel Retail channel, certain other emerging markets, and sales of used barrels.

•Reported advertising expense declined 10% for the nine months ended January 31, 2021. Underlying advertising expense also declined 10% after adjusting for the negative effect of foreign exchange. The decrease in underlying advertising expense was driven by the phasing of spend from the first half to the second half of the fiscal year. Reported SG&A expense declined 3% for the nine months ended January 31, 2021. Underlying SG&A expense declined 4% after adjusting for the effect of acquisitions and divestitures and the negative effect of foreign exchange. The decrease in underlying SG&A expense was driven by the tight management of discretionary spend.

•We delivered reported operating income of $998 million, an increase of 10% compared to the same period last year. Excluding (a) the effect of acquisitions and divestitures, (b) an estimated net decrease in distributor inventories, and (c) the positive effect of foreign exchange, underlying operating income grew 3%.

•We delivered diluted earnings per share of $1.63 for the nine months ended January 31, 2021, an increase of 12% from the $1.45 reported for the same period last year, which includes an estimated $0.19 per share benefit from the gain on sale of Early Times, Canadian Mist, and Collingwood.

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Summary of Operating Performance
	Three Months Ended January 31,										Nine Months Ended January 31,
(Dollars in millions)	2020			2021			Reported Change		Underlying Change1		2020			2021			Reported Change		Underlying Change1
Net sales	$	899		$	911		1	%	—	%	$	2,654		$	2,649		—	%	2	%
Cost of sales	342			361			5	%	4	%	980			1,053			7	%	9	%
Gross profit	557			550			(1	%)	(1	%)	1,674			1,596			(5	%)	(1	%)
Advertising	104			121			17	%	16	%	308			278			(10	%)	(10	%)
SG&A	153			157			3	%	1	%	475			460			(3	%)	(4	%)
Gain on sale of business											—			(127)			NA		NA
Other expense (income), net	(4)			(9)			176	%	(21	%)	(13)			(13)			5	%	(37	%)
Operating income	304			281			(8	%)	(8	%)	904			998			10	%	3	%
Total operating expenses2	$	253		$	269		7	%	7	%	$	770		$	725		(6	%)	(6	%)
As a percentage of net sales3
Gross profit	61.9		%	60.4		%	(1.5)	pp			63.1		%	60.3		%	(2.8)	pp
Operating income	33.8		%	30.9		%	(2.9)	pp			34.1		%	37.7		%	3.6	pp
Non-operating postretirement expense	$	1		$	1		28	%			$	3		$	4		28	%
Interest expense, net	$	19		$	21		5	%			$	58		$	60		3	%
Effective tax rate	18.6		%	15.7		%	(2.9)	pp			17.1		%	16.2		%	(0.9)	pp
Diluted earnings per share	$	0.48		$	0.45		(5	%)			$	1.45		$	1.63		12	%
Note: Totals may differ due to rounding

1See “Non-GAAP Financial Measures” above for details on our use of “underlying change,” including how we calculate these measures and why we believe this information is useful to readers.

2Operating expenses include advertising expense, SG&A expense, and other expense (income), net.

3Year-over-year changes in percentages are reported in percentage points (pp).

Fiscal 2021 Outlook

We continue to face uncertainty related to the evolving COVID-19 pandemic, its effect on the global economy, and ultimately its effect on the consumers of our brands. Our ability to make, ship, and market our brands to our consumers has not been materially impacted by COVID-19. However, we continue to closely monitor the raw material inputs from our suppliers (glass, cans, and other raw materials) and the effect COVID-19 may have on production abilities. How and where we sell our brands looks different due to COVID-19. As a result, we continue to closely monitor key developments in our markets, including (a) industry and consumer behavior, (b) macroeconomic conditions (government/financial stimulus, employment, and economic recovery, et al.), (c) changes in restrictions related to COVID-19, and (d) the response to the multiple vaccines in various stages of deployment around the world.

As a result of these uncertainties and low visibility on recovery, and consistent with our 2020 Form 10-K, we are not providing quantitative guidance for fiscal 2021, except for our effective tax rate range. From a qualitative perspective, we believe that the Travel Retail and on-premise channels will not recover during this fiscal year and many of our emerging markets and certain developed international markets will remain down for the fiscal year. Our gross margin will remain under pressure for the year driven by the expectation of higher input costs, lower fixed cost absorption, and mix shifts. However, our full-year gross margin will depend not only on the volumes of our business, but the mix of our business by geography, portfolio, channel, and size.

We expect the overall operating expense growth rate in the fourth quarter of fiscal 2021, particularly our advertising investments, to accelerate significantly compared to the third quarter of fiscal 2021 as we invest behind areas where our business is showing strong momentum along with cycling against last year’s significant decline in spend during the early weeks of COVID-19. Also, as previously announced, we plan to make a $20 million contribution to the Brown-Forman Foundation in the fourth quarter of fiscal 2021. We will remain agile, diligent, focused, and disciplined on our investments as the environment continues to evolve.

We expect our full-year effective tax rate to be in the range of 17% to 19%.

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Results of Operations – Fiscal 2021 Year-to-Date Highlights

Market Highlights

The following table provides supplemental information for our largest markets. We discuss results of the markets most affecting our performance below the table. Unless otherwise indicated, all related commentary is for the nine months ended January 31, 2021, compared to the same period last year.

Top Markets1
Nine months ended January 31, 2021	Net Sales % Change vs. 2020
Geographic area2	Reported		Acquisitions and Divestitures		Foreign Exchange		Est. Net Chg in Distributor Inventories		Underlying3
United States	3	%	—	%	—	%	4	%	7	%
Developed International	10	%	—	%	(5	%)	2	%	7	%
United Kingdom	11	%	—	%	(9	%)	1	%	3	%
Germany	18	%	—	%	(4	%)	—	%	14	%
Australia	33	%	—	%	(5	%)	—	%	28	%
France	14	%	—	%	(5	%)	—	%	9	%
Rest of Developed International	(10	%)	(1	%)	(2	%)	5	%	(8	%)
Emerging	(8	%)	—	%	6	%	3	%	1	%
Mexico	(9	%)	—	%	11	%	—	%	1	%
Poland	7	%	—	%	(1	%)	—	%	5	%
Russia	(18	%)	—	%	5	%	8	%	(4	%)
Rest of Emerging	(10	%)	—	%	7	%	4	%	—	%
Travel Retail	(55	%)	—	%	—	%	1	%	(54	%)
Non-branded and bulk	(32	%)	(1	%)	(1	%)	—	%	(34	%)
Total	—	%	—	%	—	%	3	%	2	%
Note: Results may differ due to rounding

1“Top Markets” are ranked based on percentage of total fiscal 2020 net sales. See 2020 Form 10-K “Results of Operations - Fiscal 2020 Market Highlights” and Note 8 to the Condensed Consolidated Financial Statements.

2See “Definitions” above for definitions of market aggregations presented here.

3See “Non-GAAP Financial Measures” above for details on our use of “underlying change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.

Net sales in all of the markets discussed below were affected either positively or negatively by COVID-19 during the first three quarters of fiscal 2021. See “Overview - COVID-19” above for more information around the impact of COVID-19 on our business.

•United States. Reported net sales increased 3%, while underlying net sales grew 7% after adjusting for an estimated net decrease in distributor inventories (following the April 2020 distributor inventory build due to the uncertainty around potential supply chain disruptions related to COVID-19). The underlying net sales gain was driven by (a) our premium bourbons, led by Woodford Reserve and Old Forester, supported by strong consumer takeaway trends; (b) JD RTDs, fueled by strong consumer demand for Jack Daniel’s Country Cocktails and the launch of new spirit-based RTD products; (c) volumetric growth of JDTH and Gentleman Jack; and (d) our tequilas, due to higher volumes and prices of Herradura and el Jimador. This growth was partially offset by lower net sales of JDTW reflecting unfavorable channel mix related to COVID-19 restrictions in the on-premise channel along with volume declines in the on-premise channel, which was partially offset by increased volumes in the off-premise channel.

•Developed International. Reported net sales increased 10%, while underlying net sales grew 7% after adjusting for the positive effect of foreign exchange and an estimated net decrease in distributor inventories. Underlying net sales growth was led by Australia, Germany, and France, partially offset by declines in Spain and Czechia reflecting COVID-19 related closures in these heavy tourism and on-premise focused markets.

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◦Germany’s underlying net sales growth was fueled by the volumetric gains of JD RTDs due to strong consumer demand and the launch of JDTA, partially offset by lower JDTW volumes reflecting COVID-19 related closures in the on-premise channel.

◦Australia’s underlying net sales growth was driven by higher volumes of JD RTDs fueled by strong consumer demand.

◦France’s underlying net sales growth was driven by the launch of JDTA and higher volumes of JDTH and JDTW.

◦Underlying net sales in the Rest of Developed International declined primarily due to lower JDTW volumes in Spain and Czechia as noted above.

•Emerging. Reported net sales decreased 8%, while underlying net sales grew 1% after adjusting for the negative effect of foreign exchange and an estimated net decrease in distributor inventories. Underlying net sales growth was driven by higher volumes of JDTW in Brazil, Poland, and China, largely offset by broad-based declines of the brand in Southeast Asia, India, and other Latin American markets as COVID-19 had an adverse effect on results.

◦Mexico’s underlying net sales growth reflects higher volumes of New Mix supported not only by increased demand and shelf space as a result of the temporary supply disruption of the beer industry in the first quarter due to COVID-19 related shutdowns, but also expanded consumer takeaway. This growth was mostly offset by lower volumes of Herradura and JDTW largely due to consumers trading down to lower-priced brands.

◦Poland’s underlying net sales growth was driven by higher volumes of JDTW and the launch of JDTA.

◦Underlying net sales in the Rest of Emerging were flat as higher JDTW volumes in Brazil and China were offset by lower volumes of the brand in Southeast Asia, India, and other Latin American markets.

•Travel Retail. Reported net sales declined 55%, while underlying net sales were down 54% after adjusting for an estimated net decrease in distributor inventories. The underlying net sales decline was driven by lower volumes of the Jack Daniel’s family of brands, Woodford Reserve, and Finlandia due to the implementation of travel bans and other restrictions related to COVID-19.

•Non-branded and bulk. Reported net sales declined 32%, while underlying net sales decreased 34% after adjusting for the effect of acquisitions and divestitures and the positive effect of foreign exchange. Lower volumes and prices for used barrels drove the reduction compared to the same period last year.

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Brand Highlights

The following table provides supplemental information for our largest brands. We discuss results of the brands most affecting our performance below the table. Unless otherwise indicated, all related commentary is for the nine months ended January 31, 2021, compared to the same period last year.

Major Brands
Nine months ended January 31, 2021	Volumes		Net Sales % Change vs 2020
Product category / brand family / brand1	9L Depletions1		Reported		Acquisitions and Divestitures		Foreign Exchange		Est. Net Chg in Distributor Inventories		Underlying2
Whiskey	11	%	1	%	—	%	—	%	3	%	4	%
Jack Daniel’s family of brands	11	%	(2	%)	—	%	—	%	3	%	2	%
JDTW	(7	%)	(10	%)	—	%	—	%	3	%	(7	%)
Jack Daniel’s RTD/RTP	35	%	38	%	—	%	(1	%)	(3	%)	34	%
JDTH	9	%	9	%	—	%	(1	%)	2	%	10	%
Gentleman Jack	14	%	12	%	—	%	—	%	1	%	12	%
JDTF	(1	%)	(7	%)	—	%	—	%	4	%	(2	%)
JDTA	138	%	14	%	—	%	(3	%)	96	%	107	%
Other Jack Daniel’s whiskey brands	(5	%)	(7	%)	—	%	(1	%)	8	%	—	%
Woodford Reserve	17	%	15	%	—	%	—	%	3	%	18	%
Tequila	23	%	2	%	—	%	5	%	(1	%)	6	%
el Jimador	(10	%)	(3	%)	—	%	2	%	1	%	1	%
Herradura	(13	%)	2	%	—	%	3	%	(5	%)	—	%
Wine	5	%	2	%	—	%	—	%	7	%	9	%
Vodka (Finlandia)	(18	%)	(21	%)	—	%	1	%	1	%	(19	%)
Rest of Portfolio	(1	%)	25	%	(3	%)	(21	%)	—	%	2	%
Non-branded and bulk	NA		(32	%)	(1	%)	(1	%)	—	%	(34	%)
Note: Results may differ due to rounding

1See “Definitions” above for definitions of brand aggregations and volume measures presented here.

2See “Non-GAAP Financial Measures” above for details on our use of “underlying change” in net sales, including how we calculate this measure and why we believe this information is useful to readers.

Net sales for all of the brands discussed below were affected either positively or negatively by COVID-19 during the first three quarters of fiscal 2021. See “Overview - COVID-19” above for more information around the impact of COVID-19 on our business.

•Whiskey brands’ reported net sales increased 1%, while underlying net sales grew 4% after adjusting for an estimated net decrease in distributor inventories. The underlying net sales gain was driven by (a) the growth of JD RTDs; (b) our premium bourbons, led by Woodford Reserve and Old Forester, supported by strong consumer takeaway trends; (c) the continued international launch of JDTA; and (d) volumetric growth of JDTH and Gentleman Jack. This growth was partially offset by JDTW declines.

◦The Jack Daniel’s family of brands grew underlying net sales driven by JD RTDs, the continued international launch of JDTA, and higher volumes of JDTH and Gentleman Jack, partially offset by declines of JDTW.

▪The underlying net sales decline for JDTW was driven by (a) lower volumes in Travel Retail and certain emerging markets largely reflecting the implementation of travel bans and other restrictions related to COVID-19, (b) lower volumes in the on-premise channel in many developed international markets and the United States, and (c) unfavorable channel mix in the United States and our developed international markets related to COVID-19 restrictions in the on-premise channel, which was partially offset by increased volumes in the off-premise channel in those markets.

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▪The increase in underlying net sales growth for Jack Daniel’s RTD/RTP was driven by volumetric gains in the United States (fueled by Jack Daniel’s Country Cocktails along with the launch of new spirit-based RTD products), Australia, and Germany, which was supported by strong consumer takeaway trends.

▪JDTH grew underlying net sales fueled by broad-based volumetric gains, primarily in the United States and Europe, partially offset by declines in Travel Retail due to the implementation of travel bans and other restrictions related to COVID-19.

▪The underlying net sales growth of Gentleman Jack was led by higher volumes in the United States reflecting the brands high exposure to the off-premise channel. These gains were partially offset by declines in Travel Retail due to the implementation of travel bans and other restrictions related to COVID-19.

▪The underlying net sales growth of JDTA was fueled by the brand’s continued international launch, most notably in the United Kingdom, France, and Germany.

◦Woodford Reserve grew underlying net sales fueled by volumetric growth in the United States, supported by strong consumer takeaway trends, partially offset by lower volumes in Travel Retail due to the implementation of travel bans and other restrictions related to COVID-19.

•Tequila brands grew reported net sales 2%, while underlying net sales grew 6% after adjusting for the negative effect of foreign exchange and an estimated net increase in distributor inventories. Underlying net sales growth reflects higher volumes of New Mix supported not only by increased demand and shelf space as a result of the temporary supply disruption of the beer industry in the first quarter due to COVID-19 related shutdowns in Mexico, but also expanded consumer takeaway.

•Reported net sales for our Wine business, which is focused primarily in the United States, grew 2%, while underlying net sales grew 9% after adjusting for an estimated net decrease in distributor inventories. The increase in underlying net sales was driven by volumetric growth and higher prices of Korbel Champagne, partially offset by declines of Sonoma-Cutrer reflecting COVID-19 related restrictions in the on-premise channel where this brand is focused.

•Reported net sales for Finlandia declined 21%, while underlying net sales decreased 19% after adjusting for the negative effect of foreign exchange and an estimated net decrease in distributor inventories. The decrease in underlying net sales was due to the adverse effect of COVID-19, which drove volume declines in Travel Retail, Czechia, and Russia.

•Non-branded and bulk. See discussion for this aggregation in “Market Highlights” above.

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Year-Over-Year Period Comparisons

COVID-19 affected our results both positively and negatively during the first three quarters of fiscal 2021. See “Overview - COVID-19” above for more information around the impact of COVID-19 on our business.

Net Sales
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported net sales	1	%	—	%
Foreign exchange	(2	%)	—	%
Estimated net change in distributor inventories	1	%	3	%
Change in underlying net sales	—	%	2	%
Change in underlying net sales attributed to:
Volume	4	%	11	%
Price/mix	(3	%)	(9	%)
Note: Results may differ due to rounding

Net sales totaled $911 million, an increase of $12 million, or 1%, for the three months ended January 31, 2021, compared to the same period last year. After adjusting reported results for the positive effect of foreign exchange and an estimated net decrease in distributor inventories, primarily in the United States, underlying net sales were essentially flat. The underlying net sales result was driven by volume growth, which was offset by unfavorable price/mix. Volume growth was led by JD RTDs, New Mix, and JDTA, partially offset by declines of JDTW, Finlandia, and el Jimador. Unfavorable price/mix was driven by faster growth from our lower-priced brands (JD RTDs and New Mix) and unfavorable channel mix (primarily for JDTW in the United States) related to COVID-19 restrictions in the on-premise channel.

For the nine months ended January 31, 2021, net sales were $2.6 billion, a decrease of $5 million, or essentially flat, compared to the same period last year. After adjusting reported net sales for an estimated net decrease in distributor inventories, primarily in the United States (following the April 2020 distributor inventory build due to the uncertainty around potential supply chain disruptions related to COVID-19), underlying net sales grew 2% compared to the same period last year. The increase in underlying net sales was driven by higher volumes, partially offset by unfavorable price/mix. Volume growth was led by JD RTDs, New Mix, and JDTA, partially offset by declines of JDTW and Finlandia. Unfavorable price/mix was driven by faster growth from our lower-priced brands (JD RTDs and New Mix) and unfavorable channel mix (primarily for JDTW in the United States) related to COVID-19 restrictions in the on-premise channel. See “Results of Operations - Fiscal 2021 Year-to-Date Highlights” above for further details on underlying net sales for the nine months ended January 31, 2021.

Cost of Sales
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported cost of sales	5	%	7	%
Acquisitions and divestitures	(2	%)	(1	%)
Foreign exchange	(1	%)	—	%
Estimated net change in distributor inventories	1	%	2	%
Change in underlying cost of sales	4	%	9	%
Change in underlying cost of sales attributed to:
Volume	4	%	11	%
Cost/mix	—	%	(2	%)
Note: Results may differ due to rounding

Cost of sales of $361 million for the three months ended January 31, 2021, increased $19 million, or 5%, compared to the same period last year. Underlying cost of sales increased 4% after adjusting for (a) the effect of acquisitions and divestitures, (b) an estimated net decrease in distributor inventories, and (c) the negative effect of foreign exchange. The increase in underlying cost of sales was driven by higher volumes. Volume growth was led by JD RTDs, New Mix, and JDTA, partially offset by declines of JDTW, Finlandia, and el Jimador. A shift in portfolio mix toward our lower-cost brands (JD RTDs and New Mix) was offset by higher input costs related to agave and wood along with lower fixed cost absorption for JDTW.

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Cost of sales of $1.1 billion for the nine months ended January 31, 2021, increased $73 million, or 7%, when compared to the same period last year. Underlying cost of sales increased 9% after adjusting for an estimated net decrease in distributor inventories and the effect of acquisitions and divestitures. The increase in underlying cost of sales was driven by higher volumes, partially offset by favorable cost/mix. Volume growth was driven by JD RTDs, New Mix, and JDTA, partially offset by declines of JDTW and Finlandia. Favorable cost/mix was driven by a shift in portfolio mix toward our lower-cost brands (JD RTDs and New Mix), partially offset by higher input costs related to agave and wood along with lower fixed cost absorption for JDTW.

Gross Profit
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported gross profit	(1	%)	(5	%)
Acquisitions and divestitures	1	%	—	%
Foreign exchange	(2	%)	—	%
Estimated net change in distributor inventories	2	%	3	%
Change in underlying gross profit	(1	%)	(1	%)
Note: Results may differ due to rounding

Gross Margin
For the period ended January 31	3 months		9 Months
Prior year gross margin	61.9	%	63.1	%
Price/mix	—	%	(0.6)	%
Cost/mix	(1.4)	%	(2.1)	%
Acquisitions and divestitures	(0.5	%)	(0.2	%)
Foreign exchange	0.4	%	0.1	%
Change in gross margin	(1.5	%)	(2.8	%)
Current year gross margin	60.4	%	60.3	%
Note: Results may differ due to rounding	—		—

Gross profit of $550 million decreased $7 million, or 1%, for the three months ended January 31, 2021, compared to the same period last year. Underlying gross profit also declined 1% after adjusting for (a) the positive effect of foreign exchange, (b) an estimated net decrease in distributor inventories, and (c) the effect of acquisitions and divestitures. Gross margin for the three months ended January 31, 2021, decreased 1.5 percentage points to 60.4% from 61.9% in the same period last year. The decrease in gross margin was driven primarily by higher input costs related to agave and wood along with lower fixed cost absorption for JDTW.

Gross profit of $1.6 billion decreased $78 million, or 5%, for the nine months ended January 31, 2021, compared to the same period last year. Underlying gross profit declined 1% after adjusting for an estimated net decrease in distributor inventories. Gross margin for the nine months ended January 31, 2021, decreased 2.8 percentage points to 60.3% from 63.1% in the same period last year. The decrease in gross margin was driven primarily by (a) higher input costs related to agave and wood along with lower fixed cost absorption for JDTW and (b) an unfavorable shift in portfolio mix toward our lower-margin brands (JD RTDs and New Mix).

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Operating Expenses
Percentage change versus the prior year period ended January 31
3 Months	Reported		Acquisitions and Divestitures		Foreign Exchange		Underlying
Advertising	17	%	1	%	(2	%)	16	%
SG&A	3	%	(1	%)	(1	%)	1	%
Total operating expenses1	7	%	—	%	1	%	7	%
9 Months
Advertising	(10	%)	—	%	(1	%)	(10	%)
SG&A	(3	%)	—	%	—	%	(4	%)
Total operating expenses1	(6	%)	—	%	—	%	(6	%)
Note: Results may differ due to rounding
1Total operating expenses include advertising expense, SG&A expense, and other expense (income), net.

Operating expenses totaled $269 million, an increase of $16 million, or 7%, for the three months ended January 31, 2021, compared to the same period last year. Underlying operating expenses were also up 7% after adjusting for the positive effect of foreign exchange.

•Reported advertising expense increased 17% for the three months ended January 31, 2021. Underlying advertising expense increased 16% after adjusting for the negative effect of foreign exchange and the effect of acquisitions and divestitures. The increase in underlying advertising expense was driven by the shift of spend from the first half to the second half of the fiscal year.

•Reported SG&A expense increased 3% for the three months ended January 31, 2021. Underlying SG&A expense increased 1% after adjusting for the negative effect of foreign exchange and the effect of acquisitions and divestitures. Underlying SG&A expense increased modestly as higher compensation-related costs were partially offset by the tight management of discretionary spend (including hiring and travel freezes) as a result of the COVID-19 environment.

Operating expenses totaled $725 million, a decrease of $45 million, or 6%, for the nine months ended January 31, 2021, compared to the same period last year. Underlying operating expenses were also down 6% compared to the same period last year.

•Reported advertising expense declined 10% for the nine months ended January 31, 2021. Underlying advertising expense also declined 10% after adjusting for the negative effect of foreign exchange. The decrease in underlying advertising expense was driven by the phasing of spend and a reduction in our investment behind on-premise channel activities and various events and sponsorships that were canceled in fiscal 2021 due to COVID-19.

•Reported SG&A expense declined 3% for the nine months ended January 31, 2021. Underlying SG&A expense declined 4% after adjusting for the effect of acquisitions and divestitures and the negative effect of foreign exchange. The decrease in underlying SG&A expense was driven by the tight management of discretionary spend (including hiring and travel freezes) as a result of the COVID-19 environment.

Operating Income
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported operating income	(8	%)	10	%
Acquisitions and divestitures	1	%	(13	%)
Foreign exchange	(5	%)	(1	%)
Estimated net change in distributor inventories	4	%	7	%
Change in underlying operating income	(8	%)	3	%
Note: Results may differ due to rounding

Operating income of $281 million decreased $23 million, or 8%, for the three months ended January 31, 2021, compared to the same period last year. Underlying operating income also decreased 8% after adjusting for (a) the positive effect of foreign exchange, (b) an estimated net decrease in distributor inventories, and (c) the effect of acquisitions and divestitures. Operating margin decreased 2.9 percentage points to 30.9% for the three months ended January 31, 2021, from 33.8% in the same period last year.

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Operating income of $998 million increased $94 million, or 10%, for the nine months ended January 31, 2021, compared to the same period last year. Underlying operating income grew 3% after adjusting for (a) the effect of acquisitions and divestitures, (b) an estimated net decrease in distributor inventories, and (c) the positive effect of foreign exchange. Operating margin increased 3.6 percentage points to 37.7% for the nine months ended January 31, 2021, from 34.1% in the same period last year. The effect of acquisitions and divestitures (primarily the sale of Early Times, Canadian Mist, and Collingwood) contributed 4.5 percentage points to this increase.

The effective tax rate in the three months ended January 31, 2021, was 15.7% compared to 18.6% for the same period last year. The decrease in our effective tax rate for the three months ended January 31, 2021, was driven primarily by a deferred tax benefit related to a statutory rate change and an increase in the foreign-derived intangible income deduction.

The effective tax rate in the nine months ended January 31, 2021, was 16.2% compared to 17.1% for the same period last year. The decrease in our effective tax rate for the nine months ended January 31, 2021, was driven primarily by a deferred tax benefit related to an intercompany transfer of assets, partially offset by (a) less stock-based compensation deduction, (b) a decreased benefit in the foreign derived intangible income deduction, and (c) a lower prior-year true-up benefit.

Diluted earnings per share of $0.45 for the three months ended January 31, 2021, decreased 5% from the $0.48 reported for the same period last year largely due to a decrease in reported operating income, which was partially offset by a lower effective tax rate. Diluted earnings per share of $1.63 for the nine months ended January 31, 2021, increased 12% from the $1.45 reported for the same period last year, which includes an estimated $0.19 per share benefit from the gain on sale of Early Times, Canadian Mist, and Collingwood.

Liquidity and Financial Condition

Cash flows. Cash and cash equivalents increased $431 million during the nine months ended January 31, 2021. Cash provided by operations of $572 million was up $63 million from the same period last year, primarily reflecting lower working capital requirements.

Cash provided by investing activities was $120 million for the nine months ended January 31, 2021, an increase of $231 million compared to the same period last year. The increase primarily reflects (a) the proceeds of $177 million from our divestiture of the Early Times, Canadian Mist, and Collingwood brands and related assets (in the first quarter of fiscal 2021) and (b) a $46 million decline in capital expenditures for fixed assets and computer software.

Cash used for financing activities was $294 million during the nine months ended January 31, 2021, compared to $426 million for the same period last year. The $132 million change was largely attributable to a $127 million decrease in net repayments of short-term borrowings.

The impact on cash and cash equivalents as a result of exchange rate changes was an increase of $33 million for the nine months ended January 31, 2021, compared to a decrease of $3 million for the same period last year.

Liquidity. We generate strong cash flows from operations, which enable us to meet current obligations, fund capital expenditures, pay regular dividends, and return cash to our stockholders from time to time through share repurchases and special dividends. Our investment-grade credit ratings (A1 by Moody’s and A- by Standard & Poor’s) provide us with financial flexibility when accessing global credit markets and allow us to reserve adequate debt capacity for investment opportunities and unforeseen events.

To ensure uninterrupted business operations during the ongoing COVID-19 crisis, and to preserve adequate liquidity during these uncertain times, we have (a) managed our operating expenses closely and limited discretionary spending, (b) re-prioritized capital projects where prudent, and (c) actively managed our working capital. To support our business partners, we have extended additional credit to some of our customers who were most directly affected by the crisis. We continue to monitor closely the impact of the pandemic on our customers’ solvency and our ability to collect from them.

Cash and cash equivalents were $675 million at April 30, 2020, and $1,106 million at January 31, 2021. As of January 31, 2021, approximately 50% of our cash and cash equivalents were held by our foreign subsidiaries whose earnings we expect to reinvest indefinitely outside of the United States. We continue to evaluate our future cash deployment and, should we decide to repatriate additional cash held by other foreign subsidiaries, we may be required to provide for and pay additional taxes.

34

We have an $800 million commercial paper program that we regularly use to fund our short-term operational needs. In order to create a liquidity buffer, we have borrowed in excess of our immediate needs, and for longer maturities than usual. For outstanding commercial paper balances, interest rates, and days to maturity at April 30, 2020, and January 31, 2021, please see Note 6 to the Condensed Consolidated Financial Statements. The average balances, interest rates and original maturities during the periods ended January 31, 2020 and 2021, are presented below.

	Three Months Average		Nine Months Average
	January 31,		January 31,
(Dollars in millions)	2020	2021	2020	2021
Average commercial paper	$164	$308	$270	$342
Average interest rate	1.84%	0.32%	2.31%	0.53%
Average days to maturity at issuance	31	147	33	127

Our commercial paper program is supported by available commitments under our undrawn $800 million bank credit facility that expires in November 2023. Although unlikely, under extreme market conditions, one or more participating banks may not be able to fund its commitments under our credit facility. To manage this counterparty credit risk, we partner with banks that have investment grade credit ratings, limit the amount of exposure we have with each bank, and monitor the financial conditions of each bank.

While we expect to meet our short-term liquidity needs largely through cash generated from operations and borrowings under our commercial paper program, a sustained market deterioration resulting in declines in net sales and profit could require us to evaluate alternative sources of liquidity. Should we have additional liquidity needs, we believe that we could access long-term financing in the debt capital markets.

We believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our ample debt capacity enabled by our strong short-term and long-term credit ratings, will be sufficient to meet all of our future financial commitments.

On January 27, 2021, our Board of Directors declared a regular quarterly cash dividend of $0.1795 per share on our Class A and Class B common stock. Stockholders of record on March 8, 2021, will receive the dividend on April 1, 2021.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We face market risks arising from changes in foreign currency exchange rates, commodity prices, and interest rates. Foreign currency fluctuations affect our net investments in foreign subsidiaries and foreign currency-denominated cash flows. Commodity price changes can affect our production and supply chain costs. Interest rate changes affect (a) the fair value of our fixed-rate debt, and (b) cash flows and earnings related to our variable-rate debt and interest-bearing investments. We manage market risks through procurement strategies as well as the use of derivative and other financial instruments. Our risk management program is governed by policies that authorize and control the nature and scope of transactions that we use to mitigate market risks. Since April 30, 2020, there have been no material changes to the market risks faced by us or to our risk management program.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) (our principal executive and principal financial officers), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures: (a) are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and (b) include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting. There has been no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

35

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We operate in a litigious environment and we are sued in the normal course of business. We do not anticipate that any pending legal proceedings will have, individually or in the aggregate, a material adverse effect on our financial position, results of operations, or liquidity.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our 2020 Form 10-K and Part II, Item 1A. Risk Factors in our First Quarter 2021 Form 10-Q, which could materially adversely affect our business, financial condition, or future results. There have been no material changes to the risk factors disclosed in our 2020 Form 10-K and our First Quarter 2021 Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The following documents are filed with this report:

31.1	CEO Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.2	CFO Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32	CEO and CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (not considered to be filed).
101	The following materials from Brown-Forman Corporation's Quarterly Report on Form 10-Q for the quarter ended January 31, 2021, in Inline XBRL (eXtensible Business Reporting Language) format: (a) Condensed Consolidated Statements of Operations, (b) Condensed Consolidated Statements of Comprehensive Income, (c) Condensed Consolidated Balance Sheets, (d) Condensed Consolidated Statements of Cash Flows, and (e) Notes to the Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File in Inline XBRL format (included in Exhibit 101).

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BROWN-FORMAN CORPORATION
		(Registrant)
Date:	March 3, 2021	By:	/s/ Jane C. Morreau
			Jane C. Morreau
			Executive Vice President and Chief Financial Officer
			(On behalf of the Registrant and as Principal Financial Officer)

37

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Lawson E. Whiting, certify that:

1.      I have reviewed this Quarterly Report on Form 10-Q of Brown-Forman Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)      Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	March 3, 2021	By:	/s/ Lawson E. Whiting
			Lawson E. Whiting
			President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002

I, Jane C. Morreau, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Brown-Forman Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)      Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)      Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	March 3, 2021	By:	/s/ Jane C. Morreau
			Jane C. Morreau
			Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Brown-Forman Corporation (“the Company”) on Form 10-Q for the period ended January 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in the capacity as an officer of the Company, that:

(1)The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	March 3, 2021
		By:	/s/ Lawson E. Whiting
			Lawson E. Whiting
			President and Chief Executive Officer
		By:	/s/ Jane C. Morreau
			Jane C. Morreau
			Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certificate is being furnished solely for purposes of Section 906 and is not being filed as part of the Report.

XML

Document and Entity Information - shares	9 Months Ended
	Jan. 31, 2021	Feb. 28, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jan. 31, 2021
Document Transition Report	false
Entity File Number	001-00123
Entity Registrant Name	Brown-Forman Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	61-0143150
Entity Address, Address Line One	850 Dixie Highway
Entity Address, City or Town	Louisville,
Entity Address, State or Province	KY
Entity Address, Postal Zip Code	40210
City Area Code	502
Local Phone Number	585-1100
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0000014693
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--04-30
Common stock, Class A, voting [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A Common Stock (voting), $0.15 par value
Trading Symbol	BFA
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		169,109,992
Common stock, Class B, nonvoting [Member]
Document Information [Line Items]
Title of 12(b) Security	Class B Common Stock (nonvoting), $0.15 par value
Trading Symbol	BFB
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		309,585,407
1.20% notes, due July 7, 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	1.200% Notes due 2026
Trading Symbol	BF26
Security Exchange Name	NYSE
2.60% notes, due July 7, 2028 [Member]
Document Information [Line Items]
Title of 12(b) Security	2.600% Notes due 2028
Trading Symbol	BF28
Security Exchange Name	NYSE

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020
Income Statement [Abstract]
Sales	$ 1,222	$ 1,178	$ 3,481	$ 3,404
Excise taxes	311	279	832	750
Net sales	911	899	2,649	2,654
Cost of sales	361	342	1,053	980
Gross profit	550	557	1,596	1,674
Advertising expenses	121	104	278	308
Selling, general, and administrative expenses	157	153	460	475
Gain on sale of business	0	0	(127)	0
Other expense (income), net	(9)	(4)	(13)	(13)
Operating income	281	304	998	904
Non-operating postretirement expense	1	1	4	3
Interest income	0	(1)	(1)	(4)
Interest expense	21	20	61	62
Income before income taxes	259	284	934	843
Income taxes	40	53	151	144
Net income	$ 219	$ 231	$ 783	$ 699
Earnings per share:
Basic (dollars per share)	$ 0.46	$ 0.48	$ 1.64	$ 1.46
Diluted (dollars per share)	$ 0.45	$ 0.48	$ 1.63	$ 1.45

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 219	$ 231	$ 783	$ 699
Other comprehensive income (loss), net of tax:
Currency translation adjustments	47	6	113	3
Cash flow hedge adjustments	(33)	(1)	(72)	1
Postretirement benefits adjustments	5	3	17	10
Net other comprehensive income (loss)	19	8	58	14
Comprehensive income	$ 238	$ 239	$ 841	$ 713

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Jan. 31, 2021	Apr. 30, 2020
Assets
Cash and cash equivalents	$ 1,106	$ 675
Accounts receivable, less allowance for doubtful accounts of $11 at April 30 and $10 at January 31	820	570
Inventories:
Barreled whiskey	1,090	1,092
Finished goods	306	320
Work in process	200	172
Raw materials and supplies	127	101
Total inventories	1,723	1,685
Other current assets	265	335
Total current assets	3,914	3,265
Property, plant, and equipment, net	826	848
Goodwill	774	756
Other intangible assets	676	635
Deferred tax assets	68	15
Other assets	237	247
Total assets	6,495	5,766
Liabilities
Accounts payable and accrued expenses	603	517
Dividends payable	86	0
Accrued income taxes	43	30
Short-term borrowings	312	333
Total current liabilities	1,044	880
Long-term debt	2,347	2,269
Deferred tax liabilities	146	177
Accrued pension and other postretirement benefits	296	297
Other liabilities	194	168
Total liabilities	4,027	3,791
Commitments and contingencies
Stockholders' Equity
Retained earnings	3,125	2,708
Accumulated other comprehensive income (loss), net of tax	(489)	(547)
Treasury stock, at cost (6,323,000 and 5,880,000 shares at April 30 and January 31, respectively)	(240)	(258)
Total stockholders' equity	2,468	1,975
Total liabilities and stockholders' equity	6,495	5,766
Parenthetical Information [Abstract]
Allowance for doubtful accounts	$ 10	$ 11
Treasury stock, shares	5,880,000	6,323,000
Common stock, Class A, voting [Member]
Stockholders' Equity
Common stock	$ 25	$ 25
Parenthetical Information [Abstract]
Common stock, par value	$ 0.15	$ 0.15
Common stock, shares authorized	170,000,000	170,000,000
Common stock, shares issued	170,000,000	170,000,000
Common stock, Class B, nonvoting [Member]
Stockholders' Equity
Common stock	$ 47	$ 47
Parenthetical Information [Abstract]
Common stock, par value	$ 0.15	$ 0.15
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	314,532,000	314,532,000

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Cash flows from operating activities:
Net income	$ 783	$ 699
Adjustments to reconcile net income to net cash provided by operations:
Gain on sale of business	(127)	0
Depreciation and amortization	58	55
Stock-based compensation expense	9	8
Deferred income tax provision (benefit)	(56)	30
Other, net	(15)	6
Changes in assets and liabilities, net of business acquisitions and dispositions:
Accounts receivable	(219)	(125)
Inventories	(14)	(142)
Other current assets	30	(33)
Accounts payable and accrued expenses	68	(6)
Accrued income taxes	16	10
Other operating assets and liabilities	39	7
Cash provided by operating activities	572	509
Cash flows from investing activities:
Proceeds from sale of business	177	0
Acquisition of business, net of cash acquired	(14)	(22)
Additions to property, plant, and equipment	(41)	(84)
Computer software expenditures	(2)	(5)
Cash provided by (used for) investing activities	120	(111)
Cash flows from financing activities:
Proceeds from short-term borrowings, maturities greater than 90 days	344	0
Repayments of short-term borrowings, maturities greater than 90 days	(342)	0
Net change in short-term borrowings, maturities of 90 days or less	(25)	(150)
Payments of withholding taxes related to stock-based awards	(18)	(33)
Acquisition of treasury stock	0	(1)
Dividends paid	(253)	(242)
Cash used for financing activities	(294)	(426)
Effect of exchange rate changes on cash and cash equivalents	33	(3)
Net increase (decrease) in cash and cash equivalents	431	(31)
Cash and cash equivalents, beginning of period	675	307
Cash and cash equivalents, end of period	$ 1,106	$ 276

XML

Condensed Consolidated Financial Statements

9 Months Ended

Jan. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements 

We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. In accordance with those rules and regulations, we condensed or omitted certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). In our opinion, the accompanying financial statements include all adjustments, consisting only of normal recurring adjustments (unless otherwise indicated), necessary for a fair statement of our financial results for the periods presented in these financial statements. The results for interim periods are not necessarily indicative of future or annual results.

We suggest that you read these condensed financial statements together with the financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2020, as amended (2020 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our 2020 Form 10-K.

XML

Earnings Per Share

9 Months Ended

Jan. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share 

We calculate basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share further includes the dilutive effect of stock-based compensation awards. We calculate that dilutive effect using the “treasury stock method” (as defined by GAAP).

The following table presents information concerning basic and diluted earnings per share:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions, except per share amounts)	2020		2021		2020		2021
Net income available to common stockholders	$	231	$	219	$	699	$	783
Share data (in thousands):
Basic average common shares outstanding	477,898		478,599		477,643		478,471
Dilutive effect of stock-based awards	2,859		2,237		2,793		2,194
Diluted average common shares outstanding	480,757		480,836		480,436		480,665
Basic earnings per share	$	0.48	$	0.46	$	1.46	$	1.64
Diluted earnings per share	$	0.48	$	0.45	$	1.45	$	1.63

We excluded common stock-based awards for approximately 0 shares and 298,000 shares from the calculation of diluted earnings per share for the three months ended January 31, 2020 and 2021, respectively. We excluded common stock-based awards for approximately 295,000 shares and 211,000 shares from the calculation of diluted earnings per share for the nine months ended January 31, 2020 and 2021, respectively. We excluded those awards because they were not dilutive for those periods under the treasury stock method.

XML

Inventories	9 Months Ended
	Jan. 31, 2021
Inventory Disclosure [Abstract]
Inventories	InventoriesInventories are valued at the lower of cost or net realizable value. Some of our consolidated inventories are valued using the last-in, first-out (LIFO) method, which we use for the majority of our U.S. inventories. If the LIFO method had not been used, inventories at current cost would have been $311 million higher than reported as of April 30, 2020, and $342 million higher than reported as of January 31, 2021. Changes in the LIFO valuation reserve for interim periods are based on an allocation of the projected change for the entire fiscal year, recognized proportionately over the remainder of the fiscal year.

XML

Goodwill and Other Intangible Assets

9 Months Ended

Jan. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The following table shows the changes in goodwill (which includes no accumulated impairment losses) and other intangible assets during the nine months ended January 31, 2021:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2020	$	756	$	635
Sale of business (Note 14)	(4)		(1)
Acquisition (Note 14)	6		8
Foreign currency translation adjustment	16		34
Balance at January 31, 2021	$	774	$	676

Our other intangible assets consist of trademarks and brand names, all with indefinite useful lives.

XML

Commitments and Contingencies

9 Months Ended

Jan. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

We operate in a litigious environment, and we are sued in the normal course of business. Sometimes plaintiffs seek substantial damages. Significant judgment is required in predicting the outcome of these suits and claims, many of which take years to adjudicate. We accrue estimated costs for a contingency when we believe that a loss is probable and we can make a reasonable estimate of the loss, and then adjust the accrual as appropriate to reflect changes in facts and circumstances. We do not believe it is reasonably possible that these existing loss contingencies, individually or in the aggregate, would have a material adverse effect on our financial position, results of operations, or liquidity. No material accrued loss contingencies were recorded as of January 31, 2021.

We have guaranteed the repayment by a third-party importer of its obligation under a bank credit facility that it uses in connection with its importation of our products in Russia. If the importer were to default on that obligation, which we believe is unlikely, our maximum possible exposure under the existing terms of the guaranty would be approximately $9 million (subject to changes in foreign currency exchange rates). Both the fair value and carrying amount of the guaranty are insignificant. As of January 31, 2021, our actual exposure under the guaranty of the importer’s obligation was approximately $6 million. We also have accounts receivable from that importer of approximately $10 million at January 31, 2021, which we expect to collect in full. Based on the financial support we provide to the importer, we believe it meets the definition of a variable interest entity. However, because we do not control this entity, it is not included in our consolidated financial statements.

On May 30, 2019, we notified Bacardi Martini Ltd. (Bacardi) of our intention not to renew the terms of our United Kingdom (U.K.) Cost Sharing Agreement (the Agreement) whereby Bacardi provided certain services (e.g., warehousing and logistics, sales, reporting, treasury, tax, and other services) and Brown-Forman and Bacardi split the associated overhead for those services. For purposes of conducting business, Brown-Forman and Bacardi established a U.K. trade name, “Bacardi Brown-Forman Brands,” through which our products and Bacardi’s products were sold in the U.K. On a monthly basis, Bacardi would remit to us the cash representing revenues from sales of our products, net of our agreed contributions for overhead costs under the Agreement. On April 30, 2020, the Agreement expired according to its terms.

Following delivery of our notice and upon expiration of the Agreement, Bacardi alleged that it was entitled to approximately £49 million under the principle of commercial agency in the U.K., as well as additional compensation for the winding up of business conducted under the Agreement and for remitting the associated funds owed to us. From monthly settlements following the expiration of the Agreement, Bacardi withheld over £50 million owed to us, effectively bypassing the dispute resolution process under the Agreement.

In response to Bacardi’s actions, we initiated a lawsuit on August 20, 2020, in the Commercial Court in the U.K. seeking reimbursement of the amounts wrongfully withheld. Shortly thereafter, Bacardi filed a demand for arbitration seeking a determination that it was entitled to compensation as a commercial agent and for additional compensation for the work completed following the expiration of the Agreement.

Since it was raised, we have disputed Bacardi’s claim of commercial agency compensation and issued demands that Bacardi adhere to the dispute resolution process mandated by the Agreement and return the over £50 million that Bacardi has wrongfully withheld from us. Given the early stages of the litigation and arbitration process, we are unable to estimate the range of reasonably possible loss, if any. The withheld amount is included in accounts receivable in the accompanying condensed consolidated balance sheet as of January 31, 2021.

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Debt

9 Months Ended

Jan. 31, 2021

Debt Disclosure [Abstract]

Debt

Debt

Our long-term debt (net of unamortized discount and issuance costs) consists of:

(Principal and carrying amounts in millions)	April 30, 2020		January 31, 2021
2.250% senior notes, $250 principal amount, due January 15, 2023	$	249	$	249
3.500% senior notes, $300 principal amount, due April 15, 2025	297		298
1.200% senior notes, €300 principal amount, due July 7, 2026	324		362
2.600% senior notes, £300 principal amount, due July 7, 2028	369		408
4.000% senior notes, $300 principal amount, due April 15, 2038	294		294
3.750% senior notes, $250 principal amount, due January 15, 2043	248		248
4.500% senior notes, $500 principal amount, due July 15, 2045	488		488
	$	2,269	$	2,347

Our short-term borrowings of $333 million as of April 30, 2020, and $312 million as of January 31, 2021, consisted primarily of borrowings under our commercial paper program.

(Dollars in millions)	April 30, 2020	January 31, 2021
Commercial paper	$333	$290
Average interest rate	1.29%	0.27%
Average remaining days to maturity	73	33

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Stockholders' Equity

9 Months Ended

Jan. 31, 2021

Stockholders' Equity Attributable to Parent [Abstract]

Stockholders' Equity

Stockholders’ Equity

The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 31, 2020:

(Dollars in millions)	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital		Retained Earnings		AOCI		Treasury Stock		Total
Balance at April 30, 2019	$	25	$	47	$	—	$	2,238	$	(363)	$	(300)	$	1,647
Adoption of ASU 2018-02							43		(43)				—
Net income							186						186
Net other comprehensive income (loss)									(1)				(1)
Declaration of cash dividends							(158)						(158)
Acquisition of treasury stock											(1)		(1)
Stock-based compensation expense					3								3
Stock issued under compensation plans											16		16
Loss on issuance of treasury stock issued under compensation plans					(2)		(27)						(29)
Balance at July 31, 2019	25		47		1		2,282		(407)		(285)		1,663
Net income							282						282
Net other comprehensive income (loss)									7				7
Stock-based compensation expense					3								3
Stock issued under compensation plans											11		11
Loss on issuance of treasury stock issued under compensation plans					(4)		(20)						(24)
Balance at October 31, 2019	25		47		—		2,544		(400)		(274)		1,942
Net income							231						231
Net other comprehensive income (loss)									8				8
Declaration of cash dividends							(167)						(167)
Stock-based compensation expense					2								2
Stock issued under compensation plans											11		11
Loss on issuance of treasury stock issued under compensation plans					(2)		(20)						(22)
Balance at January 31, 2020	$	25	$	47	$	—	$	2,588	$	(392)	$	(263)	$	2,005

The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 31, 2021:

(Dollars in millions)	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital		Retained Earnings		AOCI		Treasury Stock		Total
Balance at April 30, 2020	$	25	$	47	$	—	$	2,708	$	(547)	$	(258)	$	1,975
Net income							324						324
Net other comprehensive income (loss)									24				24
Declaration of cash dividends							(167)						(167)
Stock-based compensation expense					3								3
Stock issued under compensation plans											10		10
Loss on issuance of treasury stock issued under compensation plans					(3)		(16)						(19)
Balance at July 31, 2020	25		47		—		2,849		(523)		(248)		2,150
Net income							240						240
Net other comprehensive income (loss)									15				15
Stock-based compensation expense					3								3
Stock issued under compensation plans											5		5
Loss on issuance of treasury stock issued under compensation plans					(3)		(7)						(10)
Balance at October 31, 2020	25		47		—		3,082		(508)		(243)		2,403
Net income							219						219
Net other comprehensive income (loss)									19				19
Declaration of cash dividends							(172)						(172)
Stock-based compensation expense					3								3
Stock issued under compensation plans											3		3
Loss on issuance of treasury stock issued under compensation plans					(3)		(4)						(7)
Balance at January 31, 2021	$	25	$	47	$	—	$	3,125	$	(489)	$	(240)	$	2,468

The following table shows the change in each component of accumulated other comprehensive income (AOCI), net of tax, during the nine months ended January 31, 2021:

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2020	$	(302)	$	60	$	(305)	$	(547)
Net other comprehensive income (loss)	113		(72)		17		58
Balance at January 31, 2021	$	(189)	$	(12)	$	(288)	$	(489)

The following table shows the cash dividends declared per share on our Class A and Class B common stock during the nine months ended January 31, 2021:

Declaration Date	Record Date	Payable Date	Amount per Share
May 21, 2020	June 8, 2020	July 1, 2020	$0.1743
July 23, 2020	September 4, 2020	October 1, 2020	$0.1743
November 19, 2020	December 4, 2020	January 4, 2021	$0.1795
January 27, 2021	March 8, 2021	April 1, 2021	$0.1795

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Net Sales

9 Months Ended

Jan. 31, 2021

Net Sales [Abstract]

Net Sales

Net Sales 

The following table shows our net sales by geography:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
United States	$	416	$	425	$	1,296	$	1,334
Developed International1	263		292		716		789
Emerging2	171		171		477		438
Travel Retail3	34		12		104		47
Non-branded and bulk4	15		11		61		41
Total	$	899	$	911	$	2,654	$	2,649

1Represents net sales of branded products to “advanced economies” as defined by the International Monetary Fund (IMF), excluding the United States. Our largest developed international markets are the United Kingdom, Germany, Australia, and France.

2Represents net sales of branded products to “emerging and developing economies” as defined by the IMF. Our largest emerging markets are Mexico, Poland, and Russia.

3Represents net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military regardless of customer location.

4Includes net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

The following table shows our net sales by product category:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
Whiskey1	$	701	$	731	$	2,086	$	2,101
Tequila2	74		72		219		224
Wine3	62		50		159		162
Vodka4	32		26		89		71
Rest of portfolio	15		21		40		50
Non-branded and bulk5	15		11		61		41
Total	$	899	$	911	$	2,654	$	2,649

1Includes all whiskey spirits and whiskey-based flavored liqueurs, ready-to-drink, and ready-to-pour products. The brands included in this category are the Jack Daniel's family of brands, the Woodford Reserve family of brands, the Old Forester family of brands, GlenDronach, BenRiach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft. Also includes the Early Times, Canadian Mist, and Collingwood brands, which we divested on July 31, 2020 (Note 14).

2Includes el Jimador, the Herradura family of brands, New Mix, Pepe Lopez, and Antiguo.

3Includes Korbel Champagnes and Sonoma-Cutrer wines.

4Includes Finlandia.

5Includes net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

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Pension and Other Postretirement Benefits

9 Months Ended

Jan. 31, 2021

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

The following table shows the components of the net cost of pension and other postretirement benefits recognized for our U.S. benefit plans. Information about similar international plans is not presented due to immateriality.

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
Pension Benefits:
Service cost	$	6	$	7	$	18	$	20
Interest cost	8		6		24		19
Expected return on plan assets	(12)		(12)		(35)		(35)
Amortization of:
Prior service cost (credit)	—		—		1		1
Net actuarial loss	5		7		14		20
Net cost	$	7	$	8	$	22	$	25
Other Postretirement Benefits:
Service cost	$	—	$	—	$	1	$	1
Interest cost	1		1		1		1
Amortization of prior service cost (credit)	(1)		(1)		(2)		(2)
Net cost	$	—	$	—	$	—	$	—

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Income Taxes

9 Months Ended

Jan. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our consolidated interim effective tax rate is based on our expected annual operating income, statutory tax rates, and income tax laws in the various jurisdictions where we operate. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the fiscal quarter in which the related event or a change in judgment occurs. The effective tax rate for the three months ended January 31, 2021, was 15.7% compared to 18.6% for the same period last year. The decrease in our effective tax rate for the three months ended January 31, 2021, was driven primarily by a deferred tax benefit related to a statutory rate change and an increase in the foreign derived intangible income deduction. The effective tax rate for the nine months ended January 31, 2021, was 16.2% compared to 17.1% for the same period last year. The decrease in our effective tax rate for the nine months ended January 31, 2021, was driven primarily by a deferred tax benefit related to an intercompany transfer of assets partially offset by (a) less stock-based compensation deduction, (b) a decreased benefit in the foreign derived intangible income deduction, and (c) a lower prior-year true-up benefit.

We have asserted that the undistributed earnings of the majority of our foreign subsidiaries are reinvested indefinitely outside the United States. Therefore, no income taxes have been provided for any outside basis differences inherent in these subsidiaries other than those subject to the one-time repatriation tax. We have a limited number of subsidiaries that are not permanently reinvested and therefore we have recorded the deferred tax liability related to the undistributed earnings (but not for their outside basis differences).

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Derivative Financial Instruments and Hedging Activities

9 Months Ended

Jan. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

Derivative Financial Instruments and Hedging Activities

We are subject to market risks, including the effect of fluctuations in foreign currency exchange rates, commodity prices, and interest rates. We use derivatives to help manage financial exposures that occur in the normal course of business. We formally document the purpose of each derivative contract, which includes linking the contract to the financial exposure it is designed to mitigate. We do not hold or issue derivatives for trading or speculative purposes.

We use currency derivative contracts to limit our exposure to the foreign currency exchange rate risk that we cannot mitigate internally by using netting strategies. We designate most of these contracts as cash flow hedges of forecasted transactions (expected to occur within three years). We record all changes in the fair value of cash flow hedges in AOCI until the underlying hedged transaction occurs, at which time we reclassify that amount into earnings.

We do not designate some of our currency derivatives as hedges because we use them to partially offset the immediate earnings impact of changes in foreign currency exchange rates on existing assets or liabilities. We immediately recognize the change in fair value of these contracts in earnings.

We had outstanding currency derivatives, related primarily to our euro, British pound, and Australian dollar exposures, with notional amounts for all hedged currencies totaling $1,026 million at April 30, 2020, and $1,092 million at January 31, 2021. The maximum term of outstanding derivative contracts was 36 months at both April 30, 2020, and January 31, 2021.

We also use foreign currency-denominated debt instruments to help manage our foreign currency exchange rate risk. We designate a portion of those debt instruments as net investment hedges, which are intended to mitigate foreign currency exposure related to non-U.S. dollar net investments in certain foreign subsidiaries. Any change in value of the designated portion of the hedging instruments is recorded in AOCI, offsetting the foreign currency translation adjustment of the related net investments that is also recorded in AOCI. The amount of foreign currency-denominated debt instruments designated as net investment hedges was $613 million at April 30, 2020, and $673 million at January 31, 2021.

At inception, we expect each financial instrument designated as a hedge to be highly effective in offsetting the financial exposure it is designed to mitigate. We also assess the effectiveness on an ongoing basis. If determined to no longer be highly effective, designation and accounting for the instrument as a hedge would be discontinued.

We use forward purchase contracts with suppliers to protect against corn price volatility. We expect to take physical delivery of the corn underlying each contract and use it for production over a reasonable period of time. Accordingly, we account for these contracts as normal purchases rather than as derivative instruments.

The following tables present the pre-tax impact that changes in the fair value of our derivative instruments and non-derivative hedging instruments had on AOCI and earnings:

		Three Months Ended
		January 31,
(Dollars in millions)	Classification	2020		2021
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	4	$	(39)
Net gain (loss) reclassified from AOCI into earnings	Sales	5		4
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(1)	$	(6)
Net gain (loss) recognized in earnings	Other income (expense), net	4		4
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(5)	$	(33)
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,178	$	1,222
Other income (expense), net		4		9

		Nine Months Ended
		January 31,
(Dollars in millions)	Classification	2020		2021
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	17	$	(73)
Net gain (loss) reclassified from AOCI into earnings	Sales	16		21
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(2)	$	(11)
Net gain (loss) recognized in earnings	Other income (expense), net	6		15
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(2)	$	(66)
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	3,404	$	3,481
Other income (expense), net		13		13

We expect to reclassify $9 million of deferred net losses on cash flow hedges recorded in AOCI as of January 31, 2021, to earnings during the next 12 months. This reclassification would offset the anticipated earnings impact of the underlying hedged exposures. The actual amounts that we ultimately reclassify to earnings will depend on the exchange rates in effect when the underlying hedged transactions occur.

The following table presents the fair values of our derivative instruments:

		April 30, 2020				January 31, 2021
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	49	$	(1)	$	7	$	(2)
Currency derivatives	Other assets	30		—		1		—
Currency derivatives	Accrued expenses	—		—		3		(14)
Currency derivatives	Other liabilities	—		—		1		(17)
Not designated as hedges:
Currency derivatives	Other current assets	—		—		—		—
Currency derivatives	Other assets	—		—		—		—
Currency derivatives	Accrued expenses	—		(2)		—		(1)
Currency derivatives	Other liabilities	—		—		—		—

The fair values reflected in the above table are presented on a gross basis. However, as discussed further below, the fair values of those instruments subject to net settlement agreements are presented on a net basis in our balance sheets.

In our statements of cash flows, we classify cash flows related to cash flow hedges in the same category as the cash flows from the hedged items.

Credit risk. We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the contracts. To manage this risk, we contract only with major financial institutions that have earned investment-grade credit ratings and with whom we have standard International Swaps and Derivatives Association (ISDA) agreements that allow for net settlement of the derivative contracts. Also, we have established counterparty credit guidelines that we monitor regularly, and we monetize contracts when we believe it is warranted. Because of these safeguards, we believe we have no derivative positions that warrant credit valuation adjustments.

Some of our derivative instruments require us to maintain a specific level of creditworthiness, which we have maintained. If our creditworthiness were to fall below that level, then the counterparties to our derivative instruments could request immediate

payment or collateralization for derivative instruments in net liability positions. The aggregate fair value of all derivatives with creditworthiness requirements that were in a net liability position was $2 million at April 30, 2020, and $27 million at January 31, 2021.

Offsetting. As noted above, our derivative contracts are governed by ISDA agreements that allow for net settlement of derivative contracts with the same counterparty. It is our policy to present the fair values of current derivatives (i.e., those with a remaining term of 12 months or less) with the same counterparty on a net basis in our balance sheets. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. We do not net current derivatives with noncurrent derivatives in our balance sheets.

The following table summarizes the gross and net amounts of our derivative contracts:

(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet		Net Amounts
April 30, 2020
Derivative assets	$	79	$	(1)	$	78	$	—	$	78
Derivative liabilities	(3)		1		(2)		—		(2)
January 31, 2021
Derivative assets	12		(6)		6		(1)		5
Derivative liabilities	(34)		6		(28)		1		(27)

No cash collateral was received or pledged related to our derivative contracts as of April 30, 2020, or January 31, 2021.

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Fair Value Measurements

9 Months Ended

Jan. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The following table summarizes the assets and liabilities measured or disclosed at fair value on a recurring basis:

	April 30, 2020				January 31, 2021
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	675	$	675	$	1,106	$	1,106
Currency derivatives	78		78		6		6
Liabilities
Currency derivatives	2		2		28		28
Short-term borrowings	333		333		312		312
Long-term debt	2,269		2,486		2,347		2,749

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We categorize the fair values of assets and liabilities into three levels based on the assumptions (inputs) used to determine those values. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are:

•Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2 – Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in inactive markets; or other inputs that are observable or can be derived from or corroborated by observable market data.

•Level 3 – Unobservable inputs supported by little or no market activity.

We determine the fair values of our currency derivatives (forward contracts) using standard valuation models. The significant inputs used in these models, which are readily available in public markets or can be derived from observable market transactions, include the applicable spot exchange rates, forward exchange rates, and interest rates. These fair value measurements are categorized as Level 2 within the valuation hierarchy.

We determine the fair value of long-term debt primarily based on the prices at which identical or similar debt has recently traded in the market and also considering the overall market conditions on the date of valuation. These fair value measurements are categorized as Level 2 within the valuation hierarchy.

The fair values of cash, cash equivalents, and short-term borrowings approximate the carrying amounts due to the short maturities of these instruments.

We measure some assets and liabilities at fair value on a nonrecurring basis. That is, we do not measure them at fair value on an ongoing basis, but we do adjust them to fair value in some circumstances (for example, when we determine that an asset is impaired). No material nonrecurring fair value measurements were required during the periods presented in these financial statements.

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Other Comprehensive Income

9 Months Ended

Jan. 31, 2021

Statement of Comprehensive Income [Abstract]

Comprehensive Income (Loss) Note [Text Block]

Other Comprehensive Income

The following tables show the components of net other comprehensive income (loss):

	Three Months Ended						Three Months Ended
	January 31, 2020						January 31, 2021
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	5	$	1	$	6	$	39	$	8	$	47
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	5		1		6		39		8		47
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	4		(1)		3		(39)		9		(30)
Reclassification to earnings1	(5)		1		(4)		(4)		1		(3)
Other comprehensive income (loss), net	(1)		—		(1)		(43)		10		(33)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	4		(1)		3		6		(1)		5
Other comprehensive income (loss), net	4		(1)		3		6		(1)		5
Total other comprehensive income (loss), net	$	8	$	—	$	8	$	2	$	17	$	19
	Nine Months Ended						Nine Months Ended
	January 31, 2020						January 31, 2021
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	3	$	—	$	3	$	97	$	16	$	113
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	3		—		3		97		16		113
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	17		(4)		13		(73)		17		(56)
Reclassification to earnings1	(16)		4		(12)		(21)		5		(16)
Other comprehensive income (loss), net	1		—		1		(94)		22		(72)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	13		(3)		10		23		(6)		17
Other comprehensive income (loss), net	13		(3)		10		23		(6)		17
Total other comprehensive income (loss), net	$	17	$	(3)	$	14	$	26	$	32	$	58

1Pre-tax amount for each period is classified as sales in the accompanying condensed consolidated statements of operations.

2For the nine months ended January 31, 2021, $4 of the pre-tax amount of $23 is classified in gain on sale of business in the accompanying condensed consolidated statements of operations. Otherwise, the pre-tax amount for each period is classified as non-operating postretirement expense.

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Acquisitions and Divestitures

9 Months Ended

Jan. 31, 2021

Acquisitions and Divestitures [Abstract]

Mergers, Acquisitions and Dispositions Disclosures

Acquisitions and Divestitures

On July 31, 2020, we sold the Early Times, Canadian Mist, and Collingwood brands for $177 million in cash. The sale reflects the continued evolution of our portfolio strategy to focus on premium spirits brands. The total book value of the related business assets included in the sale was $50 million, consisting largely of inventories, the Canadian Mist production assets, and intellectual property. As a result of the sale, we recognized a pre-tax gain of $127 million during the first quarter of fiscal 2021.

On December 1, 2020, we acquired 100% of the voting interests in Part Time Rangers Holdings Limited (Part Time Rangers) for $14 million in cash (including repayment of debt). Part Time Rangers, which is based in New Zealand, produces spirits-based ready-to-drink products with all-natural fruit flavoring. The purchase price has been preliminarily allocated largely to the intangible assets of the acquired business, including goodwill of $6 million and other intangible assets of $8 million. The goodwill is primarily attributable to the value of leveraging our distribution network and brand-building expertise to grow sales of the Part Time Rangers brand. We do not expect the goodwill to be deductible for tax purposes. Part Time Rangers has been included in our consolidated financial statements since the acquisition date. Actual and pro forma results are not presented due to immateriality.

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Inventories (Policies)	9 Months Ended
	Jan. 31, 2021
Inventory Disclosure [Abstract]
Inventory, Policy [Policy Text Block]	Inventories are valued at the lower of cost or net realizable value. Some of our consolidated inventories are valued using the last-in, first-out (LIFO) method, which we use for the majority of our U.S. inventories.

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Derivative Financial Instruments and Hedging Activities (Policies)	9 Months Ended
	Jan. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Classification of Cash Flows Related to Cash Flow Hedges [Policy Text Block]	In our statements of cash flows, we classify cash flows related to cash flow hedges in the same category as the cash flows from the hedged items.
Derivatives, Offsetting Fair Value Amounts, Policy [Policy Text Block]	Offsetting. As noted above, our derivative contracts are governed by ISDA agreements that allow for net settlement of derivative contracts with the same counterparty. It is our policy to present the fair values of current derivatives (i.e., those with a remaining term of 12 months or less) with the same counterparty on a net basis in our balance sheets. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. We do not net current derivatives with noncurrent derivatives in our balance sheet

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Earnings Per Share (Tables)

9 Months Ended

Jan. 31, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table presents information concerning basic and diluted earnings per share:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions, except per share amounts)	2020		2021		2020		2021
Net income available to common stockholders	$	231	$	219	$	699	$	783
Share data (in thousands):
Basic average common shares outstanding	477,898		478,599		477,643		478,471
Dilutive effect of stock-based awards	2,859		2,237		2,793		2,194
Diluted average common shares outstanding	480,757		480,836		480,436		480,665
Basic earnings per share	$	0.48	$	0.46	$	1.46	$	1.64
Diluted earnings per share	$	0.48	$	0.45	$	1.45	$	1.63

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Jan. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

The following table shows the changes in goodwill (which includes no accumulated impairment losses) and other intangible assets during the nine months ended January 31, 2021:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2020	$	756	$	635
Sale of business (Note 14)	(4)		(1)
Acquisition (Note 14)	6		8
Foreign currency translation adjustment	16		34
Balance at January 31, 2021	$	774	$	676

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Debt (Tables)

9 Months Ended

Jan. 31, 2021

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Our long-term debt (net of unamortized discount and issuance costs) consists of:

(Principal and carrying amounts in millions)	April 30, 2020		January 31, 2021
2.250% senior notes, $250 principal amount, due January 15, 2023	$	249	$	249
3.500% senior notes, $300 principal amount, due April 15, 2025	297		298
1.200% senior notes, €300 principal amount, due July 7, 2026	324		362
2.600% senior notes, £300 principal amount, due July 7, 2028	369		408
4.000% senior notes, $300 principal amount, due April 15, 2038	294		294
3.750% senior notes, $250 principal amount, due January 15, 2043	248		248
4.500% senior notes, $500 principal amount, due July 15, 2045	488		488
	$	2,269	$	2,347

Schedule of Short-term Debt [Table Text Block]

(Dollars in millions)	April 30, 2020	January 31, 2021
Commercial paper	$333	$290
Average interest rate	1.29%	0.27%
Average remaining days to maturity	73	33

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Stockholders' Equity (Tables)

9 Months Ended

Jan. 31, 2021

Stockholders' Equity Attributable to Parent [Abstract]

Schedule of Stockholders Equity [Table Text Block]

The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 31, 2020:

(Dollars in millions)	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital		Retained Earnings		AOCI		Treasury Stock		Total
Balance at April 30, 2019	$	25	$	47	$	—	$	2,238	$	(363)	$	(300)	$	1,647
Adoption of ASU 2018-02							43		(43)				—
Net income							186						186
Net other comprehensive income (loss)									(1)				(1)
Declaration of cash dividends							(158)						(158)
Acquisition of treasury stock											(1)		(1)
Stock-based compensation expense					3								3
Stock issued under compensation plans											16		16
Loss on issuance of treasury stock issued under compensation plans					(2)		(27)						(29)
Balance at July 31, 2019	25		47		1		2,282		(407)		(285)		1,663
Net income							282						282
Net other comprehensive income (loss)									7				7
Stock-based compensation expense					3								3
Stock issued under compensation plans											11		11
Loss on issuance of treasury stock issued under compensation plans					(4)		(20)						(24)
Balance at October 31, 2019	25		47		—		2,544		(400)		(274)		1,942
Net income							231						231
Net other comprehensive income (loss)									8				8
Declaration of cash dividends							(167)						(167)
Stock-based compensation expense					2								2
Stock issued under compensation plans											11		11
Loss on issuance of treasury stock issued under compensation plans					(2)		(20)						(22)
Balance at January 31, 2020	$	25	$	47	$	—	$	2,588	$	(392)	$	(263)	$	2,005

The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 31, 2021:

(Dollars in millions)	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital		Retained Earnings		AOCI		Treasury Stock		Total
Balance at April 30, 2020	$	25	$	47	$	—	$	2,708	$	(547)	$	(258)	$	1,975
Net income							324						324
Net other comprehensive income (loss)									24				24
Declaration of cash dividends							(167)						(167)
Stock-based compensation expense					3								3
Stock issued under compensation plans											10		10
Loss on issuance of treasury stock issued under compensation plans					(3)		(16)						(19)
Balance at July 31, 2020	25		47		—		2,849		(523)		(248)		2,150
Net income							240						240
Net other comprehensive income (loss)									15				15
Stock-based compensation expense					3								3
Stock issued under compensation plans											5		5
Loss on issuance of treasury stock issued under compensation plans					(3)		(7)						(10)
Balance at October 31, 2020	25		47		—		3,082		(508)		(243)		2,403
Net income							219						219
Net other comprehensive income (loss)									19				19
Declaration of cash dividends							(172)						(172)
Stock-based compensation expense					3								3
Stock issued under compensation plans											3		3
Loss on issuance of treasury stock issued under compensation plans					(3)		(4)						(7)
Balance at January 31, 2021	$	25	$	47	$	—	$	3,125	$	(489)	$	(240)	$	2,468

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table shows the change in each component of accumulated other comprehensive income (AOCI), net of tax, during the nine months ended January 31, 2021:

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2020	$	(302)	$	60	$	(305)	$	(547)
Net other comprehensive income (loss)	113		(72)		17		58
Balance at January 31, 2021	$	(189)	$	(12)	$	(288)	$	(489)

Dividends Declared [Table Text Block]

The following table shows the cash dividends declared per share on our Class A and Class B common stock during the nine months ended January 31, 2021:

Declaration Date	Record Date	Payable Date	Amount per Share
May 21, 2020	June 8, 2020	July 1, 2020	$0.1743
July 23, 2020	September 4, 2020	October 1, 2020	$0.1743
November 19, 2020	December 4, 2020	January 4, 2021	$0.1795
January 27, 2021	March 8, 2021	April 1, 2021	$0.1795

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Net Sales (Tables)

9 Months Ended

Jan. 31, 2021

Net Sales [Abstract]

Disaggregation of Revenue [Table Text Block]

The following table shows our net sales by geography:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
United States	$	416	$	425	$	1,296	$	1,334
Developed International1	263		292		716		789
Emerging2	171		171		477		438
Travel Retail3	34		12		104		47
Non-branded and bulk4	15		11		61		41
Total	$	899	$	911	$	2,654	$	2,649

1Represents net sales of branded products to “advanced economies” as defined by the International Monetary Fund (IMF), excluding the United States. Our largest developed international markets are the United Kingdom, Germany, Australia, and France.

2Represents net sales of branded products to “emerging and developing economies” as defined by the IMF. Our largest emerging markets are Mexico, Poland, and Russia.

3Represents net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military regardless of customer location.

4Includes net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

The following table shows our net sales by product category:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
Whiskey1	$	701	$	731	$	2,086	$	2,101
Tequila2	74		72		219		224
Wine3	62		50		159		162
Vodka4	32		26		89		71
Rest of portfolio	15		21		40		50
Non-branded and bulk5	15		11		61		41
Total	$	899	$	911	$	2,654	$	2,649

1Includes all whiskey spirits and whiskey-based flavored liqueurs, ready-to-drink, and ready-to-pour products. The brands included in this category are the Jack Daniel's family of brands, the Woodford Reserve family of brands, the Old Forester family of brands, GlenDronach, BenRiach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft. Also includes the Early Times, Canadian Mist, and Collingwood brands, which we divested on July 31, 2020 (Note 14).

2Includes el Jimador, the Herradura family of brands, New Mix, Pepe Lopez, and Antiguo.

3Includes Korbel Champagnes and Sonoma-Cutrer wines.

4Includes Finlandia.

5Includes net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

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Pension and Other Postretirement Benefits (Tables)

9 Months Ended

Jan. 31, 2021

Retirement Benefits [Abstract]

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

The following table shows the components of the net cost of pension and other postretirement benefits recognized for our U.S. benefit plans. Information about similar international plans is not presented due to immateriality.

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2020		2021		2020		2021
Pension Benefits:
Service cost	$	6	$	7	$	18	$	20
Interest cost	8		6		24		19
Expected return on plan assets	(12)		(12)		(35)		(35)
Amortization of:
Prior service cost (credit)	—		—		1		1
Net actuarial loss	5		7		14		20
Net cost	$	7	$	8	$	22	$	25
Other Postretirement Benefits:
Service cost	$	—	$	—	$	1	$	1
Interest cost	1		1		1		1
Amortization of prior service cost (credit)	(1)		(1)		(2)		(2)
Net cost	$	—	$	—	$	—	$	—

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Derivative Financial Instruments and Hedging Activities (Tables)

9 Months Ended

Jan. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments, Gain (Loss) [Table Text Block]

The following tables present the pre-tax impact that changes in the fair value of our derivative instruments and non-derivative hedging instruments had on AOCI and earnings:

		Three Months Ended
		January 31,
(Dollars in millions)	Classification	2020		2021
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	4	$	(39)
Net gain (loss) reclassified from AOCI into earnings	Sales	5		4
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(1)	$	(6)
Net gain (loss) recognized in earnings	Other income (expense), net	4		4
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(5)	$	(33)
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,178	$	1,222
Other income (expense), net		4		9

		Nine Months Ended
		January 31,
(Dollars in millions)	Classification	2020		2021
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	17	$	(73)
Net gain (loss) reclassified from AOCI into earnings	Sales	16		21
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(2)	$	(11)
Net gain (loss) recognized in earnings	Other income (expense), net	6		15
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(2)	$	(66)
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	3,404	$	3,481
Other income (expense), net		13		13

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following table presents the fair values of our derivative instruments:

		April 30, 2020				January 31, 2021
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	49	$	(1)	$	7	$	(2)
Currency derivatives	Other assets	30		—		1		—
Currency derivatives	Accrued expenses	—		—		3		(14)
Currency derivatives	Other liabilities	—		—		1		(17)
Not designated as hedges:
Currency derivatives	Other current assets	—		—		—		—
Currency derivatives	Other assets	—		—		—		—
Currency derivatives	Accrued expenses	—		(2)		—		(1)
Currency derivatives	Other liabilities	—		—		—		—

Offsetting Derivative Assets and Liabilities [Table Text Block]

The following table summarizes the gross and net amounts of our derivative contracts:

(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet		Net Amounts
April 30, 2020
Derivative assets	$	79	$	(1)	$	78	$	—	$	78
Derivative liabilities	(3)		1		(2)		—		(2)
January 31, 2021
Derivative assets	12		(6)		6		(1)		5
Derivative liabilities	(34)		6		(28)		1		(27)

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Fair Value Measurements (Tables)

9 Months Ended

Jan. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table summarizes the assets and liabilities measured or disclosed at fair value on a recurring basis:

	April 30, 2020				January 31, 2021
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	675	$	675	$	1,106	$	1,106
Currency derivatives	78		78		6		6
Liabilities
Currency derivatives	2		2		28		28
Short-term borrowings	333		333		312		312
Long-term debt	2,269		2,486		2,347		2,749

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Other Comprehensive Income (Tables)

9 Months Ended

Jan. 31, 2021

Statement of Comprehensive Income [Abstract]

Comprehensive Income (Loss) [Table Text Block]

The following tables show the components of net other comprehensive income (loss):

	Three Months Ended						Three Months Ended
	January 31, 2020						January 31, 2021
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	5	$	1	$	6	$	39	$	8	$	47
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	5		1		6		39		8		47
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	4		(1)		3		(39)		9		(30)
Reclassification to earnings1	(5)		1		(4)		(4)		1		(3)
Other comprehensive income (loss), net	(1)		—		(1)		(43)		10		(33)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	4		(1)		3		6		(1)		5
Other comprehensive income (loss), net	4		(1)		3		6		(1)		5
Total other comprehensive income (loss), net	$	8	$	—	$	8	$	2	$	17	$	19
	Nine Months Ended						Nine Months Ended
	January 31, 2020						January 31, 2021
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	3	$	—	$	3	$	97	$	16	$	113
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	3		—		3		97		16		113
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	17		(4)		13		(73)		17		(56)
Reclassification to earnings1	(16)		4		(12)		(21)		5		(16)
Other comprehensive income (loss), net	1		—		1		(94)		22		(72)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	13		(3)		10		23		(6)		17
Other comprehensive income (loss), net	13		(3)		10		23		(6)		17
Total other comprehensive income (loss), net	$	17	$	(3)	$	14	$	26	$	32	$	58

1Pre-tax amount for each period is classified as sales in the accompanying condensed consolidated statements of operations.

2For the nine months ended January 31, 2021, $4 of the pre-tax amount of $23 is classified in gain on sale of business in the accompanying condensed consolidated statements of operations. Otherwise, the pre-tax amount for each period is classified as non-operating postretirement expense.

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020
Basic and diluted earnings per share
Net income available to common stockholders	$ 219	$ 231	$ 783	$ 699
Share data (in thousands):
Basic average common shares outstanding	478,599	477,898	478,471	477,643
Dilutive effect of stock-based awards	2,237	2,859	2,194	2,793
Diluted average common shares outstanding	480,836	480,757	480,665	480,436
Basic earnings per share (dollars per share)	$ 0.46	$ 0.48	$ 1.64	$ 1.46
Diluted earnings per share (dollars per share)	$ 0.45	$ 0.48	$ 1.63	$ 1.45

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Earnings Per Share (Details Textual) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020
Earnings Per Share (Textual) [Abstract]
Common stock-based awards excluded from the calculation of diluted earnings per share	298	0	211	295

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Inventories (Details) - USD ($) $ in Millions	Jan. 31, 2021	Apr. 30, 2020
Inventories (Textual) [Abstract]
Excess of current costs over stated LIFO value	$ 342	$ 311

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Goodwill and Other Intangible Assets (Details) $ in Millions	9 Months Ended
	Jan. 31, 2021 USD ($)
Goodwill [Roll Forward]
Balance at April 30, 2020	$ 756
Sale of business (Note 14)	(4)
Acquisition (Note 14)	6
Foreign currency translation adjustment	16
Balance at January 31, 2021	774
Indefinite-lived Intangible Assets [Roll Forward]
Balance at April 30, 2020	635
Sale of business (Note 14)	(1)
Acquisition (Note 14)	8
Foreign currency translation adjustment	34
Balance at January 31, 2021	$ 676

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Commitments and Contingencies Guaranty (Details) - USD ($) $ in Millions	Jan. 31, 2021	Apr. 30, 2020
Concentration Risk [Line Items]
Accounts Receivable, after Allowance for Credit Loss, Current	$ 820	$ 570
Credit Concentration Risk [Member]
Concentration Risk [Line Items]
Guarantor Obligations, Maximum Exposure, Undiscounted	9
Guarantee Obligations Current Exposure	6
Accounts Receivable, after Allowance for Credit Loss, Current	$ 10

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Commitments and Contingencies Contingencies (Details) $ in Millions	Jan. 31, 2021 USD ($)
Loss Contingencies [Line Items]
Loss Contingency, Amount Sought by Counterparty	$ 49
Loss Contingency, Amount Withheld by Counterparty	$ 50

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Debt (Details) € in Millions, £ in Millions, $ in Millions	9 Months Ended	12 Months Ended
	Jan. 31, 2021 USD ($)	Apr. 30, 2020 USD ($)	Jan. 31, 2021 EUR (€)	Jan. 31, 2021 GBP (£)	Apr. 30, 2020 EUR (€)	Apr. 30, 2020 GBP (£)
Debt Instrument [Line Items]
Long-term debt, including current portion	$ 2,347	$ 2,269
Long-term debt	2,347	2,269
2.25% notes, due January 15, 2023 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 250	$ 250
Debt Instrument, Maturity Date	Jan. 15, 2023	Jan. 15, 2023
Debt Instrument, Interest Rate, Stated Percentage	2.25%	2.25%	2.25%	2.25%	2.25%	2.25%
Long-term debt, including current portion	$ 249	$ 249
3.50% senior notes, due April 15, 2025 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 300	$ 300
Debt Instrument, Maturity Date	Apr. 15, 2025	Apr. 15, 2025
Debt Instrument, Interest Rate, Stated Percentage	3.50%	3.50%	3.50%	3.50%	3.50%	3.50%
Long-term debt, including current portion	$ 298	$ 297
1.20% notes, due July 7, 2026 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount | €			€ 300		€ 300
Debt Instrument, Maturity Date	Jul. 07, 2026	Jul. 07, 2026
Debt Instrument, Interest Rate, Stated Percentage	1.20%	1.20%	1.20%	1.20%	1.20%	1.20%
Long-term debt, including current portion	$ 362	$ 324
2.60% notes, due July 7, 2028 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount | £				£ 300		£ 300
Debt Instrument, Maturity Date	Jul. 07, 2028	Jul. 07, 2028
Debt Instrument, Interest Rate, Stated Percentage	2.60%	2.60%	2.60%	2.60%	2.60%	2.60%
Long-term debt, including current portion	$ 408	$ 369
4.00% senior notes, due April 15, 2038 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 300	$ 300
Debt Instrument, Maturity Date	Apr. 15, 2038	Apr. 15, 2038
Debt Instrument, Interest Rate, Stated Percentage	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%
Long-term debt, including current portion	$ 294	$ 294
3.75% notes, due January 15, 2043 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 250	$ 250
Debt Instrument, Maturity Date	Jan. 15, 2043	Jan. 15, 2043
Debt Instrument, Interest Rate, Stated Percentage	3.75%	3.75%	3.75%	3.75%	3.75%	3.75%
Long-term debt, including current portion	$ 248	$ 248
4.50% notes, due July 15, 2045 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500	$ 500
Debt Instrument, Maturity Date	Jul. 15, 2045	Jul. 15, 2045
Debt Instrument, Interest Rate, Stated Percentage	4.50%	4.50%	4.50%	4.50%	4.50%	4.50%
Long-term debt, including current portion	$ 488	$ 488

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Debt Short-term Borrowings (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Jan. 31, 2021	Apr. 30, 2020
Short-term Debt [Abstract]
Short-term borrowings	$ 312	$ 333
Commercial Paper	$ 290	$ 333
Commercial Paper, Weighted Average Interest Rate, at Point in Time	0.27%	1.29%
Commercial Paper Borrowings, Average Remaining Maturity	33 days	73 days

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Stockholders' Equity (Details) - USD ($) $ in Millions		3 Months Ended						9 Months Ended
	May 01, 2019	Jan. 31, 2021	Oct. 31, 2020	Jul. 31, 2020	Jan. 31, 2020	Oct. 31, 2019	Jul. 31, 2019	Jan. 31, 2021	Jan. 31, 2020
Beginning balance	$ 1,647	$ 2,403	$ 2,150	$ 1,975	$ 1,942	$ 1,663	$ 1,647	$ 1,975	$ 1,647
Net income		219	240	324	231	282	186	783	699
Net other comprehensive income (loss)		19	15	24	8	7	(1)	58	14
Declaration of cash dividends		(172)		(167)	(167)		(158)
Acquisition of treasury stock							(1)
Stock-based compensation expense		3	3	3	2	3	3
Stock issued under compensation plans		3	5	10	11	11	16
Loss on issuance of treasury stock issued under compensation plans		(7)	(10)	(19)	(22)	(24)	(29)
Ending balance		2,468	2,403	2,150	2,005	1,942	1,663	2,468	2,005
Additional Paid-in Capital [Member]
Beginning balance	0	0	0	0	0	1	0	0	0
Stock-based compensation expense		3	3	3	2	3	3
Loss on issuance of treasury stock issued under compensation plans		(3)	(3)	(3)	(2)	(4)	(2)
Ending balance		0	0	0	0	0	1	0	0
Retained Earnings [Member]
Beginning balance	2,238	3,082	2,849	2,708	2,544	2,282	2,238	2,708	2,238
Adoption of ASU 2018-02	43
Net income		219	240	324	231	282	186
Declaration of cash dividends		(172)		(167)	(167)		(158)
Loss on issuance of treasury stock issued under compensation plans		(4)	(7)	(16)	(20)	(20)	(27)
Ending balance		3,125	3,082	2,849	2,588	2,544	2,282	3,125	2,588
AOCI Attributable to Parent [Member]
Beginning balance	(363)	(508)	(523)	(547)	(400)	(407)	(363)	(547)	(363)
Adoption of ASU 2018-02	(43)
Net other comprehensive income (loss)		19	15	24	8	7	(1)
Ending balance		(489)	(508)	(523)	(392)	(400)	(407)	(489)	(392)
Treasury Stock, Common [Member]
Beginning balance	(300)	(243)	(248)	(258)	(274)	(285)	(300)	(258)	(300)
Acquisition of treasury stock							(1)
Stock issued under compensation plans		3	5	10	11	11	16
Ending balance		(240)	(243)	(248)	(263)	(274)	(285)	(240)	(263)
Common stock, Class A, voting [Member] | Common Stock [Member]
Beginning balance	25	25	25	25	25	25	25	25	25
Ending balance		25	25	25	25	25	25	25	25
Common stock, Class B, nonvoting [Member] | Common Stock [Member]
Beginning balance	$ 47	47	47	47	47	47	47	47	47
Ending balance		$ 47	$ 47	$ 47	$ 47	$ 47	$ 47	$ 47	$ 47

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Stockholders' Equity Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended						9 Months Ended
	Jan. 31, 2021	Oct. 31, 2020	Jul. 31, 2020	Jan. 31, 2020	Oct. 31, 2019	Jul. 31, 2019	Jan. 31, 2021	Jan. 31, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			$ (547)				$ (547)
Net other comprehensive income (loss)	$ 19	$ 15	24	$ 8	$ 7	$ (1)	58	$ 14
Ending balance	(489)						(489)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			(302)				(302)
Net other comprehensive income (loss)	47			6			113	3
Ending balance	(189)						(189)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			60				60
Net other comprehensive income (loss)	(33)			(1)			(72)	1
Ending balance	(12)						(12)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			(305)				(305)
Net other comprehensive income (loss)	5			3			17	$ 10
Ending balance	(288)						$ (288)
AOCI Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net other comprehensive income (loss)	$ 19	$ 15	$ 24	$ 8	$ 7	$ (1)

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Stockholders' Equity Dividends (Details)	9 Months Ended
	Jan. 31, 2021 $ / shares
July 2020 dividend payment [Member]
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	May 21, 2020
Dividends Payable, Date of Record	Jun. 08, 2020
Dividends Payable, Date to be Paid	Jul. 01, 2020
Common Stock, Dividends, Per Share, Declared	$ 0.1743
October 2020 dividend payment [Member]
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	Jul. 23, 2020
Dividends Payable, Date of Record	Sep. 04, 2020
Dividends Payable, Date to be Paid	Oct. 01, 2020
Common Stock, Dividends, Per Share, Declared	$ 0.1743
January 2021 dividend payment [Member]
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	Nov. 19, 2020
Dividends Payable, Date of Record	Dec. 04, 2020
Dividends Payable, Date to be Paid	Jan. 04, 2021
Common Stock, Dividends, Per Share, Declared	$ 0.1795
April 2021 dividend payment [Member]
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	Jan. 27, 2021
Dividends Payable, Date of Record	Mar. 08, 2021
Dividends Payable, Date to be Paid	Apr. 01, 2021
Common Stock, Dividends, Per Share, Declared	$ 0.1795

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Net Sales by Geography (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021		Jan. 31, 2020
Disaggregation of Revenue [Line Items]
Net sales	$ 911	$ 899	$ 2,649		$ 2,654
United States [Member]
Disaggregation of Revenue [Line Items]
Net sales	425	416	1,334		1,296
Developed International [Member]
Disaggregation of Revenue [Line Items]
Net sales	292	263	789	[1]	716	[1]
Emerging [Member]
Disaggregation of Revenue [Line Items]
Net sales	171	171	438	[2]	477	[2]
Travel Retail [Member]
Disaggregation of Revenue [Line Items]
Net sales	12	34	47	[3]	104	[3]
Non-branded and bulk [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 11	$ 15	$ 41	[4]	$ 61	[4]

[1] Represents net sales of branded products to “advanced economies” as defined by the International Monetary Fund (IMF), excluding the United States. Our largest developed international markets are the United Kingdom, Germany, Australia, and France.

[2] Represents net sales of branded products to “emerging and developing economies” as defined by the IMF. Our largest emerging markets are Mexico, Poland, and Russia.

[3] Represents net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military regardless of customer location.

[4] Includes net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

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Net Sales by Product Category (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021		Jan. 31, 2020
Disaggregation of Revenue [Line Items]
Net sales	$ 911	$ 899	$ 2,649		$ 2,654
Whiskey [Member]
Disaggregation of Revenue [Line Items]
Net sales	731	701	2,101	[1]	2,086	[1]
Tequila [Member]
Disaggregation of Revenue [Line Items]
Net sales	72	74	224	[2]	219	[2]
Vodka [Member]
Disaggregation of Revenue [Line Items]
Net sales	50	62	162	[3]	159	[3]
Wine [Member]
Disaggregation of Revenue [Line Items]
Net sales	26	32	71	[4]	89	[4]
Rest of portfolio [Member]
Disaggregation of Revenue [Line Items]
Net sales	21	15	50		40
Non-branded and bulk [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 11	$ 15	$ 41	[5]	$ 61	[5]

[1] Includes all whiskey spirits and whiskey-based flavored liqueurs, ready-to-drink, and ready-to-pour products. The brands included in this category are the Jack Daniel's family of brands, the Woodford Reserve family of brands, the Old Forester family of brands, GlenDronach, BenRiach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft. Also includes the Early Times, Canadian Mist, and Collingwood brands, which we divested on July 31, 2020 (Note 14).

[2] Includes el Jimador, the Herradura family of brands, New Mix, Pepe Lopez, and Antiguo.

[3] Includes Finlandia.

[4] Includes Korbel Champagnes and Sonoma-Cutrer wines.

[5] Includes net sales of used barrels, bulk whiskey and wine, and contract bottling regardless of customer location.

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Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020	Oct. 31, 2019
Pension Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Sponsor Location [Extensible List]	country:US		country:US		country:US
Service cost	$ 7	$ 6	$ 20	$ 18
Interest cost	6	8	19	24
Expected return on plan assets	(12)	(12)	(35)	(35)
Amortization of:
Prior service cost (credit)	0	0	1	1
Net actuarial loss	7	5	20	14
Net cost	$ 8	7	$ 25	22
Other Postretirement Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Sponsor Location [Extensible List]	country:US		country:US		country:US
Service cost	$ 0	0	$ 1	1
Interest cost	1	1	1	1
Amortization of:
Prior service cost (credit)	(1)	(1)	(2)	(2)
Net cost	$ 0	$ 0	$ 0	$ 0

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Income Taxes (Details)	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020
Effective Income Tax Rate Reconciliation, Percent	15.70%	18.60%	16.20%	17.10%

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Derivative Financial Instruments and Hedging Activities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020
Total amounts presented in the accompanying consolidated statements of operations for line items affected by the net gains (losses) shown above: [Abstract]
Sales	$ 1,222	$ 1,178	$ 3,481	$ 3,404
Other income (expense), net	9	4	13	13
Foreign Currency Denominated Debt [Member]
Foreign currency-denominated debt designated as net investment hedge: [Abstract]
Net gain (loss) recognized in AOCI	(33)	(5)	(66)	(2)
Currency derivatives [Member]
Currency derivatives designated as cash flow hedges: [Abstract]
Net gain (loss) recognized in AOCI	(39)	4	(73)	17
Currency derivatives [Member] | Sales [Member]
Currency derivatives designated as cash flow hedges: [Abstract]
Net gain (loss) reclassified from AOCI into earnings	4	5	21	16
Currency derivatives not designated as hedging instruments: [Abstract]
Net gain (loss) recognized in earnings	(6)	(1)	(11)	(2)
Currency derivatives [Member] | Other Income [Member]
Currency derivatives not designated as hedging instruments: [Abstract]
Net gain (loss) recognized in earnings	$ 4	$ 4	$ 15	$ 6

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Derivative Financial Instruments and Hedging Activities (Details 1) - USD ($) $ in Millions	Jan. 31, 2021	Apr. 30, 2020
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	$ 12	$ 79
Derivative Liability, Fair Value, Gross Liability	34	3
Currency derivatives [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Current Assets [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	7	49
Derivative Liability, Fair Value, Gross Liability	(2)	(1)
Currency derivatives [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Assets [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	1	30
Derivative Liability, Fair Value, Gross Liability	0	0
Currency derivatives [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Accrued Expenses [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	3	0
Derivative Liability, Fair Value, Gross Liability	(14)	0
Currency derivatives [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Liabilities [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	1	0
Derivative Liability, Fair Value, Gross Liability	(17)	0
Currency derivatives [Member] | Not designated as hedges [Member] | Other Current Assets [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	0	0
Currency derivatives [Member] | Not designated as hedges [Member] | Other Assets [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	0	0
Currency derivatives [Member] | Not designated as hedges [Member] | Accrued Expenses [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	(1)	(2)
Currency derivatives [Member] | Not designated as hedges [Member] | Other Liabilities [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	$ 0	$ 0

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Derivative Financial Instruments and Hedging Activities (Details Textual) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jul. 31, 2020	Jan. 31, 2021	Apr. 30, 2020
Derivative Financial Instruments (Textual) [Abstract]
Maximum term of outstanding derivative contracts	36 months	36 months
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months		$ (9)
Aggregate fair value of derivatives with creditworthiness requirements that were in a net liability position		27	$ 2
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Debt Instrument, Face Amount		673	613
Foreign Exchange Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Notional Amount		$ 1,092	$ 1,026

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Offsetting Derivative Assets and Liabilities (Details) - USD ($) $ in Millions	Jan. 31, 2021	Apr. 30, 2020
Offsetting Assets and Liabilities [Line Items]
Gross Amount of Derivative Assets	$ 12	$ 79
Gross Amount of Derivative Liabilities Offset Against Derivative Assets in Balance Sheet	(6)	(1)
Net Amount of Derivative Assets Presented in Balance Sheet	6	78
Gross Amount of Derivative Liabilities Not Offset Against Derivative Assets in Balance Sheet	(1)	0
Net Amount of Derivative Assets	5	78
Gross Amount of Derivative Liabilities	(34)	(3)
Gross Amount of Derivative Assets Offset Against Derivative Liabilities in Balance Sheet	6	1
Net Amount of Derivative Liabilities Presented in Balance Sheet	28	2
Gross Amount of Derivative Assets Not Offset Against Derivative Liabilities in Balance Sheet	1	0
Net Amount of Derivative Liabilities	$ 27	$ 2

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Fair Value Measurements (Details) - USD ($) $ in Millions	Jan. 31, 2021	Apr. 30, 2020	Jan. 31, 2020	Apr. 30, 2019
Assets:
Cash and cash equivalents, Carrying Amount	$ 1,106	$ 675	$ 276	$ 307
Cash and cash equivalents, Fair Value	1,106	675
Liabilities:
Short-term borrowings, Carrying Amount	312	333
Short-term borrowings, Fair Value	312	333
Long-term debt, Carrying Amount	2,347	2,269
Fair Value, Inputs, Level 2 [Member]
Assets:
Currency derivatives, Fair Value	6	78
Liabilities:
Currency derivatives, Fair Value	28	2
Long-term debt, Fair Value	2,749	2,486
Foreign Exchange Contract [Member]
Assets:
Currency derivatives, Carrying Amount	6	78
Liabilities:
Currency derivatives, Carrying Amount	$ 28	$ 2

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Other Comprehensive Income (Details) - USD ($) $ in Millions		3 Months Ended						9 Months Ended
		Jan. 31, 2021	Oct. 31, 2020	Jul. 31, 2020	Jan. 31, 2020	Oct. 31, 2019	Jul. 31, 2019	Jan. 31, 2021	Jan. 31, 2020
Before Tax:
Net other comprehensive income (loss)		$ 2			$ 8			$ 26	$ 17
Tax Effect:
Net other comprehensive income (loss)		17			0			32	(3)
Net of Tax:
Net other comprehensive income (loss)		19	$ 15	$ 24	8	$ 7	$ (1)	58	14
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Before Tax:
Net gain (loss)		39			5			97	3
Reclassification to earnings		0			0			0	0
Net other comprehensive income (loss)		39			5			97	3
Tax Effect:
Net gain (loss)		8			1			16	0
Reclassification to earnings		0			0			0	0
Net other comprehensive income (loss)		8			1			16	0
Net of Tax:
Net gain (loss)		47			6			113	3
Reclassification to earnings		0			0			0	0
Net other comprehensive income (loss)		47			6			113	3
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Before Tax:
Net gain (loss)		(39)			4			(73)	17
Reclassification to earnings	[1]	(4)			(5)			(21)	(16)
Net other comprehensive income (loss)		(43)			(1)			(94)	1
Tax Effect:
Net gain (loss)		9			(1)			17	(4)
Reclassification to earnings	[1]	1			1			5	4
Net other comprehensive income (loss)		10			0			22	0
Net of Tax:
Net gain (loss)		(30)			3			(56)	13
Reclassification to earnings	[1]	(3)			(4)			(16)	(12)
Net other comprehensive income (loss)		(33)			(1)			(72)	1
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Before Tax:
Net gain (loss)		0			0			0	0
Reclassification to earnings	[2]	6			4			23	13
Net other comprehensive income (loss)		6			4			23	13
Tax Effect:
Net gain (loss)		0			0			0	0
Reclassification to earnings	[2]	(1)			(1)			(6)	(3)
Net other comprehensive income (loss)		(1)			(1)			(6)	(3)
Net of Tax:
Net gain (loss)		0			0			0	0
Reclassification to earnings	[2]	5			3			17	10
Net other comprehensive income (loss)		$ 5			$ 3			17	$ 10
Gain on sale of business [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Before Tax:
Reclassification to earnings								$ 4

[1] Pre-tax amount for each period is classified as sales in the accompanying condensed consolidated statements of operations.

[2] For the nine months ended January 31, 2021, $4 of the pre-tax amount of $23 is classified in gain on sale of business in the accompanying condensed consolidated statements of operations. Otherwise, the pre-tax amount for each period is classified as non-operating postretirement expense.

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Discontinued Operations and Disposal Groups (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Jan. 31, 2021	Jul. 31, 2020	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]
Disposal Group, Including Discontinued Operation, Assets		$ 50
Proceeds from Divestiture of Businesses				$ 177	$ 0
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal	$ 0	$ 127	$ 0	$ 127	$ 0

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Acquisitions (Details) - USD ($) $ in Millions	Dec. 01, 2020	Jan. 31, 2021	Apr. 30, 2020
Business Acquisition [Line Items]
Goodwill		$ 774	$ 756
Part Time Rangers Holdings Limited
Business Acquisition [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Payments to Acquire Businesses, Gross	$ 14
Goodwill	6
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets	$ 8