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 July 31, 2022

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: July 31, 2022

Class A Common Stock (voting), $0.15 par value	169,198,217
Class B Common Stock (nonvoting), $0.15 par value	309,923,769

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	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	29
PART II - OTHER INFORMATION		31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	31
SIGNATURES		32

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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
	July 31,
	2021		2022
Sales	$	1,183	$	1,288
Excise taxes	277		281
Net sales	906		1,007
Cost of sales	353		385
Gross profit	553		622
Advertising expenses	90		110
Selling, general, and administrative expenses	168		175
Other expense (income), net	6		(6)
Operating income	289		343
Interest income	(1)		(2)
Interest expense	21		19
Income before income taxes	269		326
Income taxes	77		77
Net income	$	192	$	249
Earnings per share:
Basic	$	0.40	$	0.52
Diluted	$	0.40	$	0.52

See notes to the condensed consolidated financial statements.

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BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in millions)

	Three Months Ended
	July 31,
	2021		2022
Net income	$	192	$	249
Other comprehensive income (loss), net of tax:
Currency translation adjustments	(10)		(5)
Cash flow hedge adjustments	14		4
Postretirement benefits adjustments	4		2
Net other comprehensive income (loss)	8		1
Comprehensive income	$	200	$	250

See notes to the condensed consolidated financial statements.

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BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in millions, except per share amounts)

	April 30, 2022		July 31, 2022
Assets
Cash and cash equivalents	$	868	$	899
Accounts receivable, less allowance for doubtful accounts of $13 at April 30 and $5 at July 31	813		841
Inventories:
Barreled whiskey	1,155		1,175
Finished goods	312		351
Work in process	225		226
Raw materials and supplies	126		160
Total inventories	1,818		1,912
Other current assets	277		271
Total current assets	3,776		3,923
Property, plant and equipment, net	875		880
Goodwill	761		756
Other intangible assets	586		578
Deferred tax assets	74		81
Other assets	301		303
Total assets	$	6,373	$	6,521
Liabilities
Accounts payable and accrued expenses	$	703	$	644
Dividends payable	—		90
Accrued income taxes	81		126
Current portion of long-term debt	250		250
Total current liabilities	1,034		1,110
Long-term debt	2,019		1,998
Deferred tax liabilities	219		236
Accrued pension and other postretirement benefits	183		183
Other liabilities	181		187
Total liabilities	3,636		3,714
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	3,242		3,307
Accumulated other comprehensive income (loss), net of tax	(352)		(351)
Treasury stock, at cost (5,511,000 and 5,410,000 shares at April 30 and July 31, respectively)	(225)		(221)
Total stockholders’ equity	2,737		2,807
Total liabilities and stockholders’ equity	$	6,373	$	6,521

 See notes to the condensed consolidated financial statements.

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BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in millions)

	Three Months Ended
	July 31,
	2021		2022
Cash flows from operating activities:
Net income	$	192	$	249
Adjustments to reconcile net income to net cash provided by operations:
Asset impairment charges	6		—
Depreciation and amortization	19		20
Stock-based compensation expense	4		4
Deferred income tax provision	13		3
Other, net	4		11
Changes in assets and liabilities:
Accounts receivable	(55)		(31)
Inventories	(25)		(101)
Other current assets	16		10
Accounts payable and accrued expenses	(36)		(49)
Accrued income taxes	37		45
Other operating assets and liabilities	10		12
Cash provided by operating activities	185		173
Cash flows from investing activities:
Additions to property, plant, and equipment	(14)		(33)
Computer software expenditures	(1)		(1)
Cash used for investing activities	(15)		(34)
Cash flows from financing activities:
Net change in short-term borrowings, maturities of 90 days or less	(50)		—
Payments of withholding taxes related to stock-based awards	(5)		(4)
Dividends paid	(86)		(90)
Cash used for financing activities	(141)		(94)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(7)		(14)
Net increase in cash, cash equivalents, and restricted cash	22		31
Cash, cash equivalents, and restricted cash at beginning of period	1,150		874
Cash, cash equivalents, and restricted cash at end of period	1,172		905
Less: Restricted cash (included in other current assets) at end of period	—		(6)
Cash and cash equivalents at end of period	$	1,172	$	899

See notes to the condensed consolidated financial statements.

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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, 2022 (2022 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our 2022 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
	July 31,
(Dollars in millions, except per share amounts)	2021		2022
Net income available to common stockholders	$	192	$	249
Share data (in thousands):
Basic average common shares outstanding	478,793		479,079
Dilutive effect of stock-based awards	1,925		1,365
Diluted average common shares outstanding	480,718		480,444
Basic earnings per share	$	0.40	$	0.52
Diluted earnings per share	$	0.40	$	0.52

We excluded common stock-based awards for approximately 337,000 shares and 913,000 shares from the calculation of diluted earnings per share for the three months ended July 31, 2021 and 2022, respectively. We excluded those awards because they were not dilutive for those periods under the treasury stock method.

3.    Inventories

We value some of our consolidated inventories, including most of our U.S. inventories, at the lower of cost, using the last-in, first-out (LIFO) method or market value. If the LIFO method had not been used, inventories at current cost would have been $385 million higher than reported as of April 30, 2022, and $399 million higher than reported as of July 31, 2022. 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.

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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 three months ended July 31, 2022:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2022	$	761	$	586
Foreign currency translation adjustment	(5)		(8)
Balance at July 31, 2022	$	756	$	578

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 July 31, 2022.

6.    Debt

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

(Principal and carrying amounts in millions)	April 30, 2022		July 31, 2022
2.250% senior notes, $250 principal amount, due January 15, 2023	$	250	$	250
3.500% senior notes, $300 principal amount, due April 15, 2025	298		299
1.200% senior notes, €300 principal amount, due July 7, 2026	315		305
2.600% senior notes, £300 principal amount, due July 7, 2028	374		362
4.000% senior notes, $300 principal amount, due April 15, 2038	295		295
3.750% senior notes, $250 principal amount, due January 15, 2043	248		248
4.500% senior notes, $500 principal amount, due July 15, 2045	489		489
	2,269		2,248
Less current portion	250		250
	$	2,019	$	1,998

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7.    Stockholders’ Equity

The following table shows the changes in stockholders’ equity during the three months ended July 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, 2021	$	25	$	47	$	—	$	3,243	$	(422)	$	(237)	$	2,656
Net income							192						192
Net other comprehensive income (loss)									8				8
Declaration of cash dividends							(172)						(172)
Stock-based compensation expense					4								4
Stock issued under compensation plans											5		5
Loss on issuance of treasury stock issued under compensation plans					(2)		(8)						(10)
Balance at July 31, 2021	$	25	$	47	$	2	$	3,255	$	(414)	$	(232)	$	2,683

The following table shows the changes in stockholders’ equity during the three months ended July 31, 2022:

(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, 2022	$	25	$	47	$	—	$	3,242	$	(352)	$	(225)	$	2,737
Net income							249						249
Net other comprehensive income (loss)									1				1
Declaration of cash dividends							(180)						(180)
Stock-based compensation expense					4								4
Stock issued under compensation plans											4		4
Loss on issuance of treasury stock issued under compensation plans					(4)		(4)						(8)
Balance at July 31, 2022	$	25	$	47	$	—	$	3,307	$	(351)	$	(221)	$	2,807

The following table shows the change in each component of accumulated other comprehensive income (AOCI), net of tax, during the three months ended July 31, 2022:

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2022	$	(239)	$	37	$	(150)	$	(352)
Net other comprehensive income (loss)	(5)		4		2		1
Balance at July 31, 2022	$	(244)	$	41	$	(148)	$	(351)

The following table shows the cash dividends declared per share on our Class A and Class B common stock during the three months ended July 31, 2022:

Declaration Date	Record Date	Payable Date	Amount per Share
May 26, 2022	June 8, 2022	July 1, 2022	$0.1885
July 28, 2022	September 6, 2022	October 3, 2022	$0.1885

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8.    Net Sales 

The following table shows our net sales by geography:

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
United States	$	450	$	482
Developed International1	269		294
Emerging2	150		176
Travel Retail3	21		38
Non-branded and bulk4	16		17
Total	$	906	$	1,007

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 Germany, Australia, the United Kingdom, France, and Canada.

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

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, contract bottling, and bulk whiskey and wine, regardless of customer location.

The following table shows our net sales by product category:

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
Whiskey1	$	616	$	707
Ready-to-Drink2	108		126
Tequila3	73		70
Wine4	53		46
Vodka5	25		23
Non-branded and bulk6	16		17
Rest of portfolio	15		18
Total	$	906	$	1,007

1Includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel's family of brands (excluding the “ready-to-drink” products outlined below), the Woodford Reserve family of brands, the Old Forester family of brands, GlenDronach, Benriach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft.

2Includes the Jack Daniel’s ready-to-drink (RTD) and ready-to-pour (RTP) products, New Mix, and other RTD/RTP products.

3Includes the Herradura family of brands, el Jimador, and other tequilas.

4Includes Korbel California Champagne and Sonoma-Cutrer wines.

5Includes Finlandia.

6Includes net sales of used barrels, contract bottling, and bulk whiskey and wine.

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9.    Pension Costs

The following table shows the components of the net cost recognized for our U.S. pension plans. Similar information for other defined benefit plans is not presented due to immateriality.

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
Service cost	$	7	$	5
Interest cost	5		8
Expected return on plan assets	(11)		(11)
Amortization of net actuarial loss	6		3
Net cost	$	7	$	5

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 expected effective tax rate on ordinary income for the fiscal year is 24.2%, which is greater than the U.S. federal statutory rate of 21.0%, due to state taxes and effects of foreign operations, partially offset by the impact of the foreign-derived intangible income deduction.

The effective tax rate of 23.6% for the three months ended July 31, 2022, is lower than the expected tax rate of 24.2% on ordinary income for the full fiscal year, primarily due to (a) the reversal of a valuation allowance and (b) a prior fiscal year true-up, partially offset by the addition of a tax contingency. The effective tax rate of 23.6% for the three months ended July 31, 2022, was lower than the effective tax rate of 28.5% for the same period last year, primarily reflecting (a) a decrease in prior fiscal year true-ups, (b) decreased impact of foreign tax rate changes, and (c) the reversal of a valuation allowance in the current period.

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 to earnings.

Some of our currency derivatives are not designated 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 $801 million at April 30, 2022, and $741 million at July 31, 2022. The maximum term of outstanding derivative contracts was 36 months at April 30, 2022 and 33 months at July 31, 2022.

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 $636 million at April 30, 2022, and $617 million at July 31, 2022.

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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 their effectiveness continually. If determined to be no longer highly effective, we discontinue designating and accounting for the instrument as a hedge.

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 table presents 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
		July 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	15	$	14
Net gain (loss) reclassified from AOCI into earnings	Sales	(3)		8
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	2	$	5
Net gain (loss) recognized in earnings	Other income (expense), net	1		1
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	7	$	20
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,183	$	1,288
Other income (expense), net		(6)		6

We expect to reclassify $31 million of deferred net gains on cash flow hedges recorded in AOCI as of July 31, 2022, 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, 2022				July 31, 2022
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	32	$	(3)	$	38	$	(3)
Currency derivatives	Other assets	20		(1)		22		—
Not designated as hedges:
Currency derivatives	Accrued expenses	—		(1)		—		—

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 investment-grade credit ratings and with whom we have standard International Swaps and Derivatives Association (ISDA)

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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.

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. None of our derivatives with creditworthiness requirements were in a net liability position at April 30, 2022 and July 31, 2022.

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 (that is, 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, 2022
Derivative assets	$	52	$	(4)	$	48	$	(1)	$	47
Derivative liabilities	(5)		4		(1)		1		—
July 31, 2022
Derivative assets	60		(3)		57		—		57
Derivative liabilities	(3)		3		—		—		—

No cash collateral was received or pledged related to our derivative contracts as of April 30, 2022, or July 31, 2022.

12.    Fair Value Measurements

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

	April 30, 2022				July 31, 2022
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	868	$	868	$	899	$	899
Currency derivatives, net	48		48		57		57
Liabilities
Currency derivatives, net	1		1		—		—
Long-term debt (including current portion)	2,269		2,239		2,248		2,221

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.

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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 and cash equivalents 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.

13.    Other Comprehensive Income

The following table shows the components of net other comprehensive income (loss):

	Three Months Ended						Three Months Ended
	July 31, 2021						July 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	(8)	$	(2)	$	(10)	$	(1)	$	(4)	$	(5)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	(8)		(2)		(10)		(1)		(4)		(5)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	15		(3)		12		14		(4)		10
Reclassification to earnings1	3		(1)		2		(8)		2		(6)
Other comprehensive income (loss), net	18		(4)		14		6		(2)		4
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	6		(2)		4		3		(1)		2
Other comprehensive income (loss), net	6		(2)		4		3		(1)		2
Total other comprehensive income (loss), net	$	16	$	(8)	$	8	$	8	$	(7)	$	1

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

2Pre-tax amount for each period is classified as non-operating postretirement expense in the accompanying condensed consolidated statements of operations.

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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, 2022 (2022 Form 10-K). Note that the results of operations for the three months ended July 31, 2022, 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 some 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.

“Organic 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 “organic” basis. We use “organic change” for the following measures of the statements of operations: (a) organic net sales; (b) organic cost of sales; (c) organic gross profit; (d) organic advertising expenses; (e) organic selling, general, and administrative (SG&A) expenses; (f) organic other expense (income) net; (g) organic operating expenses1; and (h) organic operating income. To calculate these measures, we adjust, as applicable, for (1) acquisitions and divestitures, (2) foreign exchange, and (3) impairment charges. 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, transition, 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). Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year.

During fiscal 2021, we sold our Early Times, Canadian Mist, and Collingwood brands and related assets, and entered into a related transition services agreement (TSA) for these brands. This adjustment removes the net sales and operating expenses recognized pursuant to the TSA for the non-comparable period, which is activity during the first quarter of fiscal 2022. We believe this adjustment allows for us to better understand our organic 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 organic 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.

•“Impairment charges.” This adjustment removes the impact of impairment charges from our results of operations. During the first quarter of fiscal 2022, we recognized a non-cash impairment charge of $6 million for certain fixed assets. We believe that this adjustment allows for us to better understand our organic results on a comparable basis.

We use the non-GAAP measure “organic change”, along with other metrics, 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 investment community. We provide reconciliations of the “organic change” in certain line items of the statements of operations to their nearest GAAP measures in the tables under “Results of Operations - Fiscal 2023 Year-to-Date Highlights” and “Results of Operations - Year-Over-Year Period Comparisons.” We have consistently applied the adjustments within our reconciliations in arriving at each non-GAAP measure. We believe these non-GAAP measures are useful to readers and investors because they enhance the understanding of our historical financial performance and comparability between periods.

As of the third quarter ended January 31, 2022, we changed certain non-GAAP financial measures that we have historically used. We no longer report “underlying changes” in certain measures of the statements of operations; instead, we

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

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now report “organic change” for certain measures of the statements of operations. “Organic change” includes all of the non-GAAP adjustments that we have historically made in adjusting GAAP to “underlying change” results, except that “organic change” does not include an adjustment for “estimated net change in distributor inventories,” which reflected the estimated net effect of changes in distributor inventories on changes in certain line items of the statements of operations. This change to our non-GAAP financial measures was in response to comments from and discussions with the Staff of the Securities and Exchange Commission.

Although we no longer provide non-GAAP financial measures that adjust for “estimated net change in distributor inventories,” we still believe that our results are affected by changes in distributor inventories, particularly in our largest market, the United States, where the spirits industry is subject to regulations that essentially mandate a so-called “three-tier system,” with a value chain that includes suppliers, distributors and retailers. Accordingly, we continue to provide information concerning fluctuations in distributor inventories. We believe such information is useful in understanding our performance and trends as it provides relevant information regarding customers’ demand for our products.

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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 beverage alcohol category. Below, we define the geographic and brand aggregations used in this report.

Geographic Aggregations.

In “Results of Operations - Fiscal 2023 Year-to-Date Highlights,” we provide supplemental information for our largest markets ranked by percentage of total fiscal 2022 reported net sales. Due to our decision to suspend commercial operations in Russia, it is no longer considered one of our largest markets. 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 Germany, Australia, the United Kingdom, France, and Canada. 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, Brazil, and Chile. 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, contract bottling, and bulk whiskey and wine, regardless of customer location.

Brand Aggregations.

In “Results of Operations - Fiscal 2023 Year-to-Date Highlights,” we provide supplemental information for our largest brands ranked by percentage of total fiscal 2022 reported net sales. In addition to brands that are listed by name, we include the following aggregations outlined below.

Beginning in fiscal 2023, we added “Ready-to-Drink” as a brand aggregation due to its contribution to our growth in recent years and industry-wide category growth trends. “Whiskey” no longer contains Jack Daniel’s ready-to-drink (RTD) and ready-to-pour (RTP), and “Tequila” no longer includes New Mix. These brands are now included in the “Ready-to-Drink” brand aggregation.

•“Whiskey” includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), 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.

•“American whiskey” includes the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below) and premium bourbons (defined below).

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

•“Super-premium American whiskey” includes Woodford Reserve, Gentleman Jack, and other super-premium Jack Daniel's expressions.

•“Ready-to-Drink” includes all ready-to-drink (RTD) and ready-to-pour (RTP) products. The brands included in this category are Jack Daniel’s RTD and RTP products (JD RTD/RTP), New Mix, and other RTD/RTP products.

•“Jack Daniel’s RTD and RTP” products include all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Cola, Jack Daniel’s Country Cocktails, Jack Daniel’s Double Jack, and other malt- and spirit-based Jack Daniel’s RTDs along with Jack Daniel’s Winter Jack RTP.

•“Tequila” includes the Herradura family of brands (Herradura), el Jimador, and other tequilas.

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

•“Vodka” includes Finlandia.

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

•“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 Bonded, Jack Daniel’s No. 27 Gold Tennessee Whiskey, Jack Daniel’s Bottled-in-Bond, Jack Daniel’s 10 Years Old, and Jack Daniel’s Triple Mash.

Other Metrics.

•“Shipments.” We generally record revenues when we ship or deliver our products to our customers. In this document, unless otherwise specified, we refer to shipments when discussing volume.

•“Depletions.” This is a term commonly used in the beverage alcohol industry to describe volume. Depending on the context, depletions usually 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.

•“Consumer takeaway.” When discussing trends in the market, we refer to consumer takeaway, a term commonly used in the beverage alcohol industry that 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.

•“Estimated net change in distributor inventories.” We generally recognize revenue when our products are shipped or delivered to customers. In the United States and certain other markets, our customers are distributors that sell downstream to retailers and consumers. We believe that our distributors’ downstream sales more closely reflect actual consumer demand than do our shipments to distributors. Our shipments increase distributors’ inventories, while distributors’ depletions (as described above) reduce their inventories. Therefore, it is possible that our shipments do not coincide with distributors’ downstream depletions and merely reflect changes in distributors’ inventories. Because changes in distributors’ inventories could affect our trends, we believe it is useful for investors to understand those changes in the context of our operating results.

We perform the following calculation to determine the “estimated net change in distributor inventories”:

•For both the current-year period and the comparable prior-year period, we calculate a “depletion-based” amount by (a) dividing the organic dollar amount (e.g. organic net sales) by the corresponding shipment volumes to arrive at a shipment per case amount, and (b) multiplying the resulting shipment per case amount by the corresponding depletion volumes. We subtract the year-over-year percentage change of the “depletion-based” amount from the year-over-year percentage change of the organic amount to calculate the “estimated net change in distributor inventories.”

•A positive difference is interpreted as a net increase in distributors’ inventories, which implies that organic trends could decrease as distributors’ reduce inventories; whereas, a negative difference is interpreted as a net decrease in distributors’ inventories, which implies that organic trends could increase as distributors rebuild inventories.

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:

•Our substantial dependence upon the continued growth of the Jack Daniel’s family of brands

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•Substantial competition from new entrants, consolidations by competitors and retailers, and 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

•Disruption of our distribution network or inventory fluctuations in our products by distributors, wholesalers, or retailers

•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; further legalization of marijuana; shifts in consumer purchase practices; 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

•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, or labor

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

•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

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

•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

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

•Risks associated with being a U.S.-based company with a global business, 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 whiskeys 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, corporate, sales or value-added taxes, property taxes, payroll taxes, import and export duties, and tariffs) or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur

•Decline in the social acceptability of beverage alcohol in significant markets

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

•Counterfeiting and inadequate protection of our intellectual property rights

•Significant legal disputes and proceedings, or government investigations

•Cyber breach or failure or corruption of our key information technology systems or those of our suppliers, customers, or direct and indirect business partners, or failure to comply with personal data protection laws

•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 2022 Form 10-K and those described from time to time in our future reports filed with the Securities and Exchange Commission (SEC).

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Overview

For the three months ended July 31, 2022, we experienced strong, broad-based reported net sales growth across all of our geographic clusters and Travel Retail channel reflecting (a) the continued rebuilding of distributor inventories, (b) increased travel and tourism, (c) the gradual re-opening of the on-premise channel in certain international markets, and (d) continued premiumization trends. Foreign exchange fluctuations negatively affected our results reflecting the strengthening of the dollar primarily against the euro, Turkish lira, pound sterling, and Polish zloty.

Supply chain disruptions continued to affect our business during the first quarter of fiscal 2023. Our glass supply position improved while overall supply chain logistics and transportation challenges constrained product movement and increased both input and transportation costs. We further discuss the effect of supply chain disruptions on our results where relevant below.

The removal of the European Union and United Kingdom tariffs on American whiskey positively affected our results during the first quarter of fiscal 2023. Tariffs include the combined effect of tariff-related costs, whether arising as a reduction of reported net sales or as an increase in reported cost of sales. We estimate that lower costs associated with tariffs (a) increased reported net sales growth by approximately half a percentage point, (b) reduced our reported cost of sales growth by approximately four percentage points, and (c) increased gross margin by approximately one and a half percentage points. We further discuss the estimated effect of the removal of the European Union and United Kingdom tariffs on American whiskey on our results where relevant below.

Due to Russia’s invasion of Ukraine in February 2022, reported net sales were negatively affected by (a) the suspension of our commercial operations in Russia and (b) our diminished ability to conduct business in Ukraine. We further discuss the effect of Russia’s invasion of Ukraine where relevant below.

Fiscal 2023 Year-to-Date Highlights

•We delivered reported net sales of $1.0 billion, for the three months ended July 31, 2022, an increase of 11% compared to the same period last year. The increase was driven by higher volumes and favorable price/mix, partially offset by the negative effect of foreign exchange. An estimated net increase in distributor inventories positively impacted reported net sales.

◦From a brand perspective, reported net sales growth was driven by JDTW, Woodford Reserve, and JDTH.

◦From a geographic perspective, the United States, emerging markets, developed international markets, and the Travel Retail channel all contributed significantly to reported net sales growth.

•We delivered reported operating income of $343 million for the three months ended July 31, 2022, an increase of 19% compared to the same period last year. We delivered diluted earnings per share of $0.52, an increase of 30% from the $0.40 reported for the same period last year, driven by the increase in reported operating income and the benefit of a lower effective tax rate.

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Summary of Operating Performance
	Three Months Ended July 31,
(Dollars in millions)	2021			2022			Reported Change		Organic Change1
Net sales	$	906		$	1,007		11	%	17	%
Cost of sales	353			385			9	%	12	%
Gross profit	553			622			13	%	21	%
Advertising	90			110			23	%	28	%
SG&A	168			175			4	%	7	%
Other expense (income), net	6			(6)			nm		nm
Operating income	289			343			19	%	32	%
Total operating expenses2	$	264		$	279		6	%	8	%
As a percentage of net sales3
Gross profit	61.0		%	61.8		%	0.8	pp
Operating income	31.9		%	34.0		%	2.1	pp
Interest expense, net	$	20		$	17		(18	%)
Effective tax rate	28.5		%	23.6		%	(4.9)	pp
Diluted earnings per share	$	0.40		$	0.52		30	%
Note: Totals may differ due to rounding

1See “Non-GAAP Financial Measures” above for details on our use of “organic 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).

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Results of Operations – Fiscal 2022 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 three months ended July 31, 2022 compared to the same period last year.

Top Markets1
Three months ended July 31, 2022	Net Sales % Change vs. 2022
Geographic area2	Reported		Acquisitions and Divestitures		Foreign Exchange		Organic3
United States	7	%	—	%	—	%	7	%
Developed International	9	%	—	%	10	%	19	%
Germany	13	%	—	%	14	%	26	%
Australia	15	%	—	%	1	%	16	%
United Kingdom	(8	%)	—	%	10	%	2	%
France	(24	%)	—	%	9	%	(15	%)
Canada	34	%	—	%	8	%	41	%
Rest of Developed International	32	%	—	%	15	%	47	%
Emerging	17	%	—	%	16	%	34	%
Mexico	13	%	—	%	(3	%)	10	%
Poland	6	%	—	%	18	%	24	%
Brazil	34	%	—	%	6	%	39	%
Chile	91	%	—	%	—	%	91	%
Rest of Emerging	14	%	—	%	32	%	47	%
Travel Retail	77	%	—	%	8	%	85	%
Non-branded and bulk	7	%	23	%	1	%	32	%
Total	11	%	—	%	6	%	17	%
Note: Results may differ due to rounding

1“Top Markets” are ranked based on percentage of total fiscal 2022 reported net sales (see 2022 Form 10-K “Results of Operations - Fiscal 2022 Market Highlights” and Note 8 to the Condensed Consolidated Financial Statements). Due to our decision to suspend commercial operations in Russia, it is no longer considered a “Top Market”. Russia’s year-to-date results are included in our “Emerging” and “Total” results.

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

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

The United States grew reported net sales 7% led by higher volumes and prices of Woodford Reserve along with volumetric gains of JDTH and JDTF. An estimated net increase in distributor inventories positively impacted reported net sales. This growth was partially offset by lower volumes of Korbel California Champagne and JDTW.

Developed International

•Germany’s reported net sales increased 13% fueled by volumetric gains of JDTW and JD RTDs, partially offset by the negative effect of foreign exchange.

•Australia’s reported net sales increased 15% led by higher volumes of JD RTDs and JDTW.

•United Kingdom’s reported net sales declined 8% driven by the negative effect of foreign exchange.

•France’s reported net sales declined 24% driven by (a) lower volumes of JDTW and JDTH, reflecting whiskey category declines and a reduction of promotions; and (b) the negative effect of foreign exchange.

•Canada’s reported net sales increased 34% led by higher JDTW volumes. An estimated net increase in distributor inventories positively impacted reported net sales.

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•Reported net sales in the Rest of Developed International increased 32% fueled by JDTW gains, led by Spain and Austria, partially offset by the negative effect of foreign exchange. An estimated net increase in distributor inventories positively impacted reported net sales.

Emerging

•Mexico’s reported net sales increased 13% driven by growth of New Mix and the positive effect of foreign exchange, partially offset by lower volumes of Herradura reflecting the impact of supply chain challenges.

•Poland’s reported net sales increased 6% led by higher volumes of JDTW and Finlandia, partially offset by the negative effect of foreign exchange.

•Brazil’s reported net sales increased 34% fueled by growth of JDTW, partially offset by lower volumes of JDTH.

•Chile’s reported net sales increased 91% driven by growth of JDTW and JDTH, partially offset by lower volumes of JDTA as we cycled the continued launch during the first quarter of the prior-year. An estimated net increase in distributor inventories positively impacted reported net sales.

•Reported net sales in the Rest of Emerging increased 14% led by JDTW growth in Turkey and Sub-Saharan Africa. This growth was partially offset by the negative effect of foreign exchange (reflecting the strengthening of the dollar primarily against the Turkish lira) and declines in Russia due to the suspension of our commercial operations. An estimated net increase in distributor inventories positively impacted reported net sales.

Travel Retail’s reported net sales increased 77% driven primarily by higher volumes across much of our portfolio as travel continues to rebound from the COVID-19-related travel restrictions. An estimated net increase in distributor inventories positively impacted reported net sales.

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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 three months ended July 31, 2022 compared to the same period last year.

Major Brands
Three months ended July 31, 2022	Net Sales % Change vs 2022
Product category / brand family / brand1	Reported		Acquisitions and Divestitures		Foreign Exchange		Organic2
Whiskey	15	%	—	%	7	%	22	%
JDTW	10	%	—	%	11	%	21	%
JDTH	26	%	—	%	(9	%)	16	%
Gentleman Jack	8	%	—	%	9	%	17	%
JDTF	35	%	—	%	5	%	41	%
JDTA	(29	%)	—	%	6	%	(22	%)
Woodford Reserve	38	%	—	%	1	%	39	%
Old Forester	22	%	—	%	—	%	22	%
Rest of Whiskey	19	%	1	%	8	%	28	%
Ready-to-drink	17	%	—	%	4	%	21	%
JD RTD/RTP	12	%	—	%	5	%	17	%
New Mix	44	%	—	%	(3	%)	41	%
Tequila	(4	%)	—	%	—	%	(3	%)
Herradura	(4	%)	—	%	—	%	(5	%)
el Jimador	3	%	—	%	1	%	4	%
Wine	(13	%)	—	%	—	%	(12	%)
Vodka (Finlandia)	(10	%)	—	%	13	%	3	%
Rest of Portfolio	21	%	—	%	8	%	29	%
Non-branded and bulk	7	%	23	%	1	%	32	%
Note: Results may differ due to rounding

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

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

Whiskey

•JDTW grew reported net sales 10% led by higher volumes and prices in emerging markets, developed international markets, and Travel Retail. An estimated net increase in distributor inventories positively impacted reported net sales. This growth was partially offset by the negative effect of foreign exchange and lower volumes in the United States due to difficult comparisons in the same period last year.

•Reported net sales for JDTH increased 26% driven by volumetric growth in the United States. An estimated net increase in distributor inventories positively impacted reported net sales.

•Reported net sales for Gentleman Jack increased 8% driven by higher volumes in the United States and Travel Retail, partially offset by the negative effect of foreign exchange. An estimated net increase in distributor inventories positively impacted reported net sales.

•JDTF grew reported net sales 35% driven primarily by higher volumes in the United States. An estimated net increase in distributor inventories positively impacted reported net sales.

•JDTA’s reported net sales declined 29% largely due to lower volumes in the United States as we cycled last year’s on-premise recovery. An estimated net decrease in distributor inventories negatively impacted reported net sales.

24

•Woodford Reserve’s reported net sales increased 38% driven by higher volumes and prices in the United States. An estimated net increase in distributor inventories positively impacted reported net sales.

•Old Forester’s reported net sales increased 22% driven by higher volumes in the United States. An estimated net increase in distributor inventories positively impacted reported net sales.

•Reported net sales for Rest of Whiskey increased 19% led by the launch of Jack Daniel’s Bonded in the United States.

Ready-to-Drink

•The JD RTD/RTP brand’s reported net sales grew 12% led by growth in Australia and Germany, partially offset by the negative effect of foreign exchange.

•New Mix grew reported net sales 44% fueled by growth in Mexico as we gained market share in the RTD category.

Tequila

•Herradura’s reported net sales declined 4% due to (a) cycling significant growth during the first quarter of the prior-year in the United States and (b) the impact of supply chain challenges in Mexico and the United States.

Wine reported net sales declined 13% due to lower volumes of Korbel California Champagne, partially offset by higher volumes of Sonoma-Cutrer in the United States.

Vodka (Finlandia) reported net sales declined 10% reflecting (a) the impact of the suspension of our commercial operations in Russia, (b) the negative effect of foreign exchange, and (c) the ongoing impact on our ability to conduct business in Ukraine due to Russia’s invasion of Ukraine. These declines were partially offset by broad-based growth across other international markets.

25

Year-Over-Year Period Comparisons

Net Sales
	3 months
Percentage change versus the prior year period ended July 31	Volume		Price/mix		Total
Change in reported net sales	13	%	(2	%)	11	%
Acquisitions and divestitures	—	%	—	%	—	%
Foreign exchange	—	%	6	%	6	%
Change in organic net sales	13	%	5	%	17	%
Note: Results may differ due to rounding

For the three months ended July 31, 2022, reported net sales were $1.0 billion, an increase of $101 million, or 11%, compared to the same period last year largely driven by higher volumes of New Mix, JDTW, and JD RTDs. Price/mix reflects the negative effect of foreign exchange, partially offset by higher prices of JDTW. Reported net sales were positively impacted by an estimated net increase in distributor inventories. See “Results of Operations - Fiscal 2023 Year-to-Date Highlights” above for further details on net sales for the three months ended July 31, 2022.

Cost of Sales
	3 months
Percentage change versus the prior year period ended July 31	Volume		Cost/mix		Total
Change in reported cost of sales	13	%	(4	%)	9	%
Acquisitions and divestitures	—	%	1	%	1	%
Foreign exchange	—	%	2	%	2	%
Change in organic cost of sales	13	%	(1	%)	12	%
Note: Results may differ due to rounding

For the three months ended July 31, 2022, reported cost of sales were $385 million, an increase of $32 million, or 9%, compared to the same period last year largely driven by higher volumes of New Mix, JDTW, and JD RTDs. Cost/mix reflects (a) a shift in portfolio mix toward our lower-cost brands (b) the removal of the European Union and United Kingdom tariffs on American whiskey, and (c) the positive effect of foreign exchange. These factors were partially offset by higher costs related to supply chain disruptions and the impact of inflation on our input costs. An estimated net increase in distributor inventories negatively impacted reported cost of sales.

Gross Profit
Percentage change versus the prior year period ended July 31	3 Months
Change in reported gross profit	13	%
Acquisitions and divestitures	—	%
Foreign exchange	8	%
Change in organic gross profit	21	%
Note: Results may differ due to rounding

26

Gross Margin
For the period ended July 31	3 months
Prior year gross margin	61.0	%
Price/mix	2.3	%
Cost (excluding tariffs)	(1.8)	%
Acquisitions and divestitures	0.2	%
Tariffs1	1.3	%
Foreign exchange	(1.2	%)
Change in gross margin	0.8	%
Current year gross margin	61.8	%
Note: Results may differ due to rounding	—
1“Tariffs” include the combined effect of tariff-related costs, whether arising as a reduction of reported net sales or as an increase in reported cost of sales.

For the three months ended July 31, 2022, reported gross profit of $622 million increased $70 million, or 13%, compared to the same period last year. Gross margin increased 0.8 percentage points to 61.8% from 61.0% in the same period last year. The increase in gross margin was driven by favorable price/mix and the removal of the European Union and United Kingdom tariffs on American whiskey, partially offset by (a) the negative effect of foreign exchange, (b) higher costs related to supply chain disruptions and (c) higher costs due to the impact of inflation on input costs.

Operating Expenses
Percentage change versus the prior year period ended July 31
3 Months	Reported		Impairment Charges		Foreign Exchange		Organic
Advertising	23	%	—	%	6	%	28	%
SG&A	4	%	—	%	3	%	7	%
Total operating expenses1	6	%	2	%	—	%	8	%
Note: Results may differ due to rounding
1Total operating expenses include advertising expense, SG&A expense, and other expense (income), net.

For the three months ended July 31, 2022, reported operating expenses totaled $279 million, an increase of $15 million, or 6%, compared to the same period last year.

•Reported advertising expense increased 23% for the three months ended July 31, 2022 driven largely by higher investment in the United States supporting JDTW, Herradura, the launch of Jack Daniel’s Bonded and Jack Daniel’s Triple Mash, and Woodford Reserve, partially offset by the positive effect of foreign exchange.

•Reported SG&A expense increased 4% for the three months ended July 31, 2022 driven primarily by higher compensation-related expenses and higher discretionary spend, partially offset by accruals for non-income-based tax contingencies expensed during the same period last year along with the positive effect of foreign exchange.

Operating Income
Percentage change versus the prior year period ended July 31	3 Months
Change in reported operating income	19	%
Acquisitions and divestitures	—	%
Impairment charges	(2	%)
Foreign exchange	16	%
Change in organic operating income	32	%
Note: Results may differ due to rounding

For the three months ended July 31, 2022, reported operating income totaled $343 million, an increase of $54 million, or 19%, compared to the same period last year. Operating margin increased 2.1 percentage points to 34.0% from 31.9% in the same period last year.

27

The effective tax rate for the three months ended July 31, 2022, was 23.6% compared to 28.5% for the same period last year. The decrease in our effective tax rate was driven primarily by (a) a decrease in prior fiscal year true-ups, (b) decreased impact of foreign tax rate changes, and (c) the reversal of a valuation allowance in the current period.

Diluted earnings per share of $0.52, an increase of 30% from the $0.40 reported for the same period last year, driven by the increase in reported operating income and the benefit of a lower effective tax rate.

Fiscal 2023 Outlook

Below we discuss our outlook for fiscal 2023 which reflects the trends, developments, and uncertainties, including those described above, we expect to affect our business. When we provide guidance for organic change in certain measures of the statements of operations we do not provide guidance for the corresponding GAAP change because the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreign exchange, which could have a significant impact to our GAAP income statement measures.

The company anticipates continued growth in fiscal 2023 despite global macroeconomic and geopolitical uncertainties. Accordingly, we reiterate our guidance and continue to expect the following in fiscal 2023:

•Reflecting the strength of our portfolio of brands and strong consumer demand, we expect organic net sales growth in the mid-single digit range.

•Considering the net effect of inflation and the removal of the European Union and United Kingdom tariffs on American whiskey, we project reported gross margin to increase slightly.

•Based on the above expectations, we anticipate mid-single digit organic operating income growth.

•We expect our fiscal 2023 effective tax rate to be in the range of approximately 22% to 23%.

•Capital expenditures are planned to be in the range of $190 to $210 million.

Liquidity and Financial Condition

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

Our cash flow from operations is supplemented by our cash and cash equivalent balances, as well as access to other liquidity sources. Cash and cash equivalents were $868 million at April 30, 2022, and $899 million at July 31, 2022. As of July 31, 2022, approximately 62% 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 may decide to repatriate additional cash held by our foreign subsidiaries, which may require us to provide for and pay additional taxes.

We have an $800 million commercial paper program that we use, together with our cash flow from operations, to fund our short-term operational needs. There were no borrowings under our commercial paper program at April 30, 2022, and July 31, 2022. The average balances, interest rates, and original maturities during the periods ended July 31, 2021 and 2022, are presented below.

	Three Months Average
	July 31,
(Dollars in millions)	2021	2022
Average commercial paper	$190	$—
Average interest rate	0.16%	—%
Average days to maturity at issuance	32	—

28

Our commercial paper program is supported by available commitments under our $800 million bank credit facility that expires on November 10, 2024. At July 31, 2022, there were no borrowings outstanding under the credit facility. 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.

Our most significant short-term cash requirements relate primarily to funding our operations (such as expenditures for raw materials, production and distribution, advertising and promotion, and current taxes), repayment of our note maturing in 2023, and capital investments. Our most significant longer-term cash requirements primarily include payments related to our long-term debt, employee benefit obligations, and deferred tax liabilities.

While we expect to meet our planned 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. If we have additional liquidity needs, we believe that we could access financing in the debt capital markets, based on market conditions.

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 expected future short- and long-term financial commitments.

Cash flows. Cash provided by operations of $173 million declined $12 million from the same period last year, reflecting increased working capital offset partially by improved operating results. The increase in working capital was largely attributable to higher levels of inventory, which were affected by significantly higher input costs and other effects of supply chain disruptions.

Cash used for investing activities was $34 million during the three months ended July 31, 2022, compared to $15 million for the same period last year. The $19 million increase reflects increased capital spending to expand our production capacity to meet anticipated future consumer demand.

Cash used for financing activities was $94 million during the three months ended July 31, 2022, compared to $141 million for the same period last year. The $47 million decrease largely reflects a $50 million decrease in net repayments of short-term borrowings.

Dividends. See Note 7 to the Condensed Consolidated Financial Statements included Part I, Item I of this Quarterly Report for information about cash dividends declared per share on our Class A and Class B common stock since the beginning of fiscal 2023.

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, 2022, 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.

29

Changes in Internal Control over Financial Reporting. During the first quarter of fiscal 2023, we upgraded our SAP enterprise resource planning system to SAP S/4 Hana. In connection with the upgrade, we modified the design and documentation of our internal control processes and procedures affected by the new system. Except for these changes, there have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

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 2022 Form 10-K, 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 2022 Form 10-K.

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:

Exhibit Index
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 July 31, 2022, 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).

The following document has been previously filed:

Exhibit Index
10.1	Brown-Forman 2022 Omnibus Compensation Plan (incorporated by reference to Appendix B of the Brown-Forman Corporation Definitive Proxy Statement for the July 28, 2022 Annual Meeting of Stockholders, filed on June 24, 2022).

31

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:	August 31, 2022	By:	/s/ Leanne D. Cunningham
			Leanne D. Cunningham
			Senior Vice President and Chief Financial Officer
			(On behalf of the Registrant and as Principal Financial Officer)

32

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:	August 31, 2022	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, Leanne D. Cunningham, 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:	August 31, 2022	By:	/s/ Leanne D. Cunningham
			Leanne D. Cunningham
			Senior 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 July 31, 2022, 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:	August 31, 2022
		By:	/s/ Lawson E. Whiting
			Lawson E. Whiting
			President and Chief Executive Officer
		By:	/s/ Leanne D. Cunningham
			Leanne D. Cunningham
			Senior 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.

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	Jul. 31, 2022 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 31, 2022
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
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Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
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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
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Common stock, Class B, nonvoting [Member]
Document Information [Line Items]
Title of 12(b) Security	Class B Common Stock (nonvoting), $0.15 par value
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Security Exchange Name	NYSE
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1.20% notes, due July 7, 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	1.200% Notes due 2026
Trading Symbol	BF26
Security Exchange Name	NYSE
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Document Information [Line Items]
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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Income Statement [Abstract]
Sales	$ 1,288	$ 1,183
Excise taxes	281	277
Net sales	1,007	906
Cost of sales	385	353
Gross profit	622	553
Advertising expenses	110	90
Selling, general, and administrative expenses	175	168
Other expense (income), net	(6)	6
Operating income	343	289
Interest income	(2)	(1)
Interest expense	19	21
Income before income taxes	326	269
Income taxes	77	77
Net income	$ 249	$ 192
Earnings per share:
Basic (dollars per share)	$ 0.52	$ 0.40
Diluted (dollars per share)	$ 0.52	$ 0.40

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 249	$ 192
Other comprehensive income (loss), net of tax:
Currency translation adjustments	(5)	(10)
Cash flow hedge adjustments	4	14
Postretirement benefits adjustments	2	4
Net other comprehensive income (loss)	1	8
Comprehensive income	$ 250	$ 200

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Jul. 31, 2022	Apr. 30, 2022
Assets
Cash and cash equivalents	$ 899	$ 868
Accounts receivable, less allowance for doubtful accounts of $13 at April 30 and $5 at July 31	841	813
Inventories:
Barreled whiskey	1,175	1,155
Finished goods	351	312
Work in process	226	225
Raw materials and supplies	160	126
Total inventories	1,912	1,818
Other current assets	271	277
Total current assets	3,923	3,776
Property, plant, and equipment, net	880	875
Goodwill	756	761
Other intangible assets	578	586
Deferred tax assets	81	74
Other assets	303	301
Total assets	6,521	6,373
Liabilities
Accounts payable and accrued expenses	644	703
Dividends payable	90	0
Accrued income taxes	126	81
Current portion of long-term debt	250	250
Total current liabilities	1,110	1,034
Long-term debt	1,998	2,019
Deferred tax liabilities	236	219
Accrued pension and other postretirement benefits	183	183
Other liabilities	187	181
Total liabilities	3,714	3,636
Commitments and contingencies
Stockholders' Equity
Retained earnings	3,307	3,242
Accumulated other comprehensive income (loss), net of tax	(351)	(352)
Treasury stock, at cost (5,511,000 and 5,410,000 shares at April 30 and July 31, respectively)	(221)	(225)
Total stockholders' equity	2,807	2,737
Total liabilities and stockholders' equity	6,521	6,373
Common stock, Class A, voting [Member]
Stockholders' Equity
Common stock	25	25
Common stock, Class B, nonvoting [Member]
Stockholders' Equity
Common stock	$ 47	$ 47

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jul. 31, 2022	Apr. 30, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 5	$ 13
Treasury stock, shares	5,410,000	5,511,000
Class of Stock [Line Items]
Current portion of long-term debt, Carrying Amount	$ 250	$ 250
Common Class A [Member]
Class of Stock [Line Items]
Common stock, par value (dollars per share)	$ 0.15	$ 0.15
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Nonvoting Common Stock [Member]
Class of Stock [Line Items]
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Common stock, shares authorized	400,000,000	400,000,000
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Cash flows from operating activities:
Net income	$ 249	$ 192
Adjustments to reconcile net income to net cash provided by operations:
Asset impairment charges	0	6
Depreciation and amortization	20	19
Stock-based compensation expense	4	4
Deferred income tax provision	3	13
Other, net	11	4
Changes in assets and liabilities:
Accounts receivable	(31)	(55)
Inventories	(101)	(25)
Other current assets	10	16
Accounts payable and accrued expenses	(49)	(36)
Accrued income taxes	45	37
Other operating assets and liabilities	12	10
Cash provided by operating activities	173	185
Cash flows from investing activities:
Additions to property, plant, and equipment	(33)	(14)
Computer software expenditures	(1)	(1)
Cash used for investing activities	(34)	(15)
Cash flows from financing activities:
Net change in short-term borrowings, maturities of 90 days or less	0	(50)
Payments of withholding taxes related to stock-based awards	(4)	(5)
Dividends paid	(90)	(86)
Cash used for financing activities	(94)	(141)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(14)	(7)
Net increase in cash, cash equivalents, and restricted cash	31	22
Cash, cash equivalents, and restricted cash at beginning of period	874	1,150
Cash, cash equivalents, and restricted cash at end of period	905	1,172
Less: Restricted cash (included in other current assets) at end of period	(6)	0
Cash and cash equivalents at end of period	$ 899	$ 1,172

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Condensed Consolidated Financial Statements

3 Months Ended

Jul. 31, 2022

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, 2022 (2022 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our 2022 Form 10-K.

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Earnings Per Share

3 Months Ended

Jul. 31, 2022

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
	July 31,
(Dollars in millions, except per share amounts)	2021		2022
Net income available to common stockholders	$	192	$	249
Share data (in thousands):
Basic average common shares outstanding	478,793		479,079
Dilutive effect of stock-based awards	1,925		1,365
Diluted average common shares outstanding	480,718		480,444
Basic earnings per share	$	0.40	$	0.52
Diluted earnings per share	$	0.40	$	0.52

We excluded common stock-based awards for approximately 337,000 shares and 913,000 shares from the calculation of diluted earnings per share for the three months ended July 31, 2021 and 2022, respectively. We excluded those awards because they were not dilutive for those periods under the treasury stock method.

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Inventories	3 Months Ended
	Jul. 31, 2022
Inventory Disclosure [Abstract]
Inventories	InventoriesWe value some of our consolidated inventories, including most of our U.S. inventories, at the lower of cost, using the last-in, first-out (LIFO) method or market value. If the LIFO method had not been used, inventories at current cost would have been $385 million higher than reported as of April 30, 2022, and $399 million higher than reported as of July 31, 2022. 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.

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Goodwill and Other Intangible Assets

3 Months Ended

Jul. 31, 2022

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 three months ended July 31, 2022:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2022	$	761	$	586
Foreign currency translation adjustment	(5)		(8)
Balance at July 31, 2022	$	756	$	578

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

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Commitments and Contingencies	3 Months Ended
	Jul. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe 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 July 31, 2022.

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Debt

3 Months Ended

Jul. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt

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

(Principal and carrying amounts in millions)	April 30, 2022		July 31, 2022
2.250% senior notes, $250 principal amount, due January 15, 2023	$	250	$	250
3.500% senior notes, $300 principal amount, due April 15, 2025	298		299
1.200% senior notes, €300 principal amount, due July 7, 2026	315		305
2.600% senior notes, £300 principal amount, due July 7, 2028	374		362
4.000% senior notes, $300 principal amount, due April 15, 2038	295		295
3.750% senior notes, $250 principal amount, due January 15, 2043	248		248
4.500% senior notes, $500 principal amount, due July 15, 2045	489		489
	2,269		2,248
Less current portion	250		250
	$	2,019	$	1,998

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Stockholders' Equity

3 Months Ended

Jul. 31, 2022

Stockholders' Equity Attributable to Parent [Abstract]

Stockholders' Equity

Stockholders’ Equity

The following table shows the changes in stockholders’ equity during the three months ended July 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, 2021	$	25	$	47	$	—	$	3,243	$	(422)	$	(237)	$	2,656
Net income							192						192
Net other comprehensive income (loss)									8				8
Declaration of cash dividends							(172)						(172)
Stock-based compensation expense					4								4
Stock issued under compensation plans											5		5
Loss on issuance of treasury stock issued under compensation plans					(2)		(8)						(10)
Balance at July 31, 2021	$	25	$	47	$	2	$	3,255	$	(414)	$	(232)	$	2,683

The following table shows the changes in stockholders’ equity during the three months ended July 31, 2022:

(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, 2022	$	25	$	47	$	—	$	3,242	$	(352)	$	(225)	$	2,737
Net income							249						249
Net other comprehensive income (loss)									1				1
Declaration of cash dividends							(180)						(180)
Stock-based compensation expense					4								4
Stock issued under compensation plans											4		4
Loss on issuance of treasury stock issued under compensation plans					(4)		(4)						(8)
Balance at July 31, 2022	$	25	$	47	$	—	$	3,307	$	(351)	$	(221)	$	2,807

The following table shows the change in each component of accumulated other comprehensive income (AOCI), net of tax, during the three months ended July 31, 2022:

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2022	$	(239)	$	37	$	(150)	$	(352)
Net other comprehensive income (loss)	(5)		4		2		1
Balance at July 31, 2022	$	(244)	$	41	$	(148)	$	(351)

The following table shows the cash dividends declared per share on our Class A and Class B common stock during the three months ended July 31, 2022:

Declaration Date	Record Date	Payable Date	Amount per Share
May 26, 2022	June 8, 2022	July 1, 2022	$0.1885
July 28, 2022	September 6, 2022	October 3, 2022	$0.1885

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Net Sales

3 Months Ended

Jul. 31, 2022

Net Sales [Abstract]

Net Sales

Net Sales 

The following table shows our net sales by geography:

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
United States	$	450	$	482
Developed International1	269		294
Emerging2	150		176
Travel Retail3	21		38
Non-branded and bulk4	16		17
Total	$	906	$	1,007

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 Germany, Australia, the United Kingdom, France, and Canada.

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

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, contract bottling, and bulk whiskey and wine, regardless of customer location.

The following table shows our net sales by product category:

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
Whiskey1	$	616	$	707
Ready-to-Drink2	108		126
Tequila3	73		70
Wine4	53		46
Vodka5	25		23
Non-branded and bulk6	16		17
Rest of portfolio	15		18
Total	$	906	$	1,007

1Includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel's family of brands (excluding the “ready-to-drink” products outlined below), the Woodford Reserve family of brands, the Old Forester family of brands, GlenDronach, Benriach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft.

2Includes the Jack Daniel’s ready-to-drink (RTD) and ready-to-pour (RTP) products, New Mix, and other RTD/RTP products.

3Includes the Herradura family of brands, el Jimador, and other tequilas.

4Includes Korbel California Champagne and Sonoma-Cutrer wines.

5Includes Finlandia.

6Includes net sales of used barrels, contract bottling, and bulk whiskey and wine.

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Pension and Other Postretirement Benefits

3 Months Ended

Jul. 31, 2022

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Pension Costs

The following table shows the components of the net cost recognized for our U.S. pension plans. Similar information for other defined benefit plans is not presented due to immateriality.

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
Service cost	$	7	$	5
Interest cost	5		8
Expected return on plan assets	(11)		(11)
Amortization of net actuarial loss	6		3
Net cost	$	7	$	5

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Income Taxes

3 Months Ended

Jul. 31, 2022

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 expected effective tax rate on ordinary income for the fiscal year is 24.2%, which is greater than the U.S. federal statutory rate of 21.0%, due to state taxes and effects of foreign operations, partially offset by the impact of the foreign-derived intangible income deduction.

The effective tax rate of 23.6% for the three months ended July 31, 2022, is lower than the expected tax rate of 24.2% on ordinary income for the full fiscal year, primarily due to (a) the reversal of a valuation allowance and (b) a prior fiscal year true-up, partially offset by the addition of a tax contingency. The effective tax rate of 23.6% for the three months ended July 31, 2022, was lower than the effective tax rate of 28.5% for the same period last year, primarily reflecting (a) a decrease in prior fiscal year true-ups, (b) decreased impact of foreign tax rate changes, and (c) the reversal of a valuation allowance in the current period.

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Derivative Financial Instruments and Hedging Activities

3 Months Ended

Jul. 31, 2022

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 to earnings.

Some of our currency derivatives are not designated 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 $801 million at April 30, 2022, and $741 million at July 31, 2022. The maximum term of outstanding derivative contracts was 36 months at April 30, 2022 and 33 months at July 31, 2022.

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 $636 million at April 30, 2022, and $617 million at July 31, 2022.

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 their effectiveness continually. If determined to be no longer highly effective, we discontinue designating and accounting for the instrument as a hedge.

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 table presents 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
		July 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	15	$	14
Net gain (loss) reclassified from AOCI into earnings	Sales	(3)		8
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	2	$	5
Net gain (loss) recognized in earnings	Other income (expense), net	1		1
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	7	$	20
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,183	$	1,288
Other income (expense), net		(6)		6

We expect to reclassify $31 million of deferred net gains on cash flow hedges recorded in AOCI as of July 31, 2022, 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, 2022				July 31, 2022
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	32	$	(3)	$	38	$	(3)
Currency derivatives	Other assets	20		(1)		22		—
Not designated as hedges:
Currency derivatives	Accrued expenses	—		(1)		—		—

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 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.

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. None of our derivatives with creditworthiness requirements were in a net liability position at April 30, 2022 and July 31, 2022.

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 (that is, 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, 2022
Derivative assets	$	52	$	(4)	$	48	$	(1)	$	47
Derivative liabilities	(5)		4		(1)		1		—
July 31, 2022
Derivative assets	60		(3)		57		—		57
Derivative liabilities	(3)		3		—		—		—

No cash collateral was received or pledged related to our derivative contracts as of April 30, 2022, or July 31, 2022.

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Fair Value Measurements

3 Months Ended

Jul. 31, 2022

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, 2022				July 31, 2022
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	868	$	868	$	899	$	899
Currency derivatives, net	48		48		57		57
Liabilities
Currency derivatives, net	1		1		—		—
Long-term debt (including current portion)	2,269		2,239		2,248		2,221

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 and cash equivalents 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

3 Months Ended

Jul. 31, 2022

Statement of Comprehensive Income [Abstract]

Other Comprehensive Income

Other Comprehensive Income

The following table shows the components of net other comprehensive income (loss):

	Three Months Ended						Three Months Ended
	July 31, 2021						July 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	(8)	$	(2)	$	(10)	$	(1)	$	(4)	$	(5)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	(8)		(2)		(10)		(1)		(4)		(5)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	15		(3)		12		14		(4)		10
Reclassification to earnings1	3		(1)		2		(8)		2		(6)
Other comprehensive income (loss), net	18		(4)		14		6		(2)		4
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	6		(2)		4		3		(1)		2
Other comprehensive income (loss), net	6		(2)		4		3		(1)		2
Total other comprehensive income (loss), net	$	16	$	(8)	$	8	$	8	$	(7)	$	1

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

2Pre-tax amount for each period is classified as non-operating postretirement expense in the accompanying condensed consolidated statements of operations.

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Inventories (Policies)	3 Months Ended
	Jul. 31, 2022
Inventory Disclosure [Abstract]
Inventory, Policy [Policy Text Block]	We value some of our consolidated inventories, including most of our U.S. inventories, at the lower of cost, using the last-in, first-out (LIFO) method or market value.

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Derivative Financial Instruments and Hedging Activities (Policies)	3 Months Ended
	Jul. 31, 2022
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 (that is, 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)

3 Months Ended

Jul. 31, 2022

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
	July 31,
(Dollars in millions, except per share amounts)	2021		2022
Net income available to common stockholders	$	192	$	249
Share data (in thousands):
Basic average common shares outstanding	478,793		479,079
Dilutive effect of stock-based awards	1,925		1,365
Diluted average common shares outstanding	480,718		480,444
Basic earnings per share	$	0.40	$	0.52
Diluted earnings per share	$	0.40	$	0.52

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Jul. 31, 2022

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 three months ended July 31, 2022:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2022	$	761	$	586
Foreign currency translation adjustment	(5)		(8)
Balance at July 31, 2022	$	756	$	578

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Debt (Tables)

3 Months Ended

Jul. 31, 2022

Debt Disclosure [Abstract]

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

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

(Principal and carrying amounts in millions)	April 30, 2022		July 31, 2022
2.250% senior notes, $250 principal amount, due January 15, 2023	$	250	$	250
3.500% senior notes, $300 principal amount, due April 15, 2025	298		299
1.200% senior notes, €300 principal amount, due July 7, 2026	315		305
2.600% senior notes, £300 principal amount, due July 7, 2028	374		362
4.000% senior notes, $300 principal amount, due April 15, 2038	295		295
3.750% senior notes, $250 principal amount, due January 15, 2043	248		248
4.500% senior notes, $500 principal amount, due July 15, 2045	489		489
	2,269		2,248
Less current portion	250		250
	$	2,019	$	1,998

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Stockholders' Equity (Tables)

3 Months Ended

Jul. 31, 2022

Stockholders' Equity Attributable to Parent [Abstract]

Schedule of Stockholders Equity [Table Text Block]

The following table shows the changes in stockholders’ equity during the three months ended July 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, 2021	$	25	$	47	$	—	$	3,243	$	(422)	$	(237)	$	2,656
Net income							192						192
Net other comprehensive income (loss)									8				8
Declaration of cash dividends							(172)						(172)
Stock-based compensation expense					4								4
Stock issued under compensation plans											5		5
Loss on issuance of treasury stock issued under compensation plans					(2)		(8)						(10)
Balance at July 31, 2021	$	25	$	47	$	2	$	3,255	$	(414)	$	(232)	$	2,683

The following table shows the changes in stockholders’ equity during the three months ended July 31, 2022:

(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, 2022	$	25	$	47	$	—	$	3,242	$	(352)	$	(225)	$	2,737
Net income							249						249
Net other comprehensive income (loss)									1				1
Declaration of cash dividends							(180)						(180)
Stock-based compensation expense					4								4
Stock issued under compensation plans											4		4
Loss on issuance of treasury stock issued under compensation plans					(4)		(4)						(8)
Balance at July 31, 2022	$	25	$	47	$	—	$	3,307	$	(351)	$	(221)	$	2,807

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 three months ended July 31, 2022:

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2022	$	(239)	$	37	$	(150)	$	(352)
Net other comprehensive income (loss)	(5)		4		2		1
Balance at July 31, 2022	$	(244)	$	41	$	(148)	$	(351)

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 three months ended July 31, 2022:

Declaration Date	Record Date	Payable Date	Amount per Share
May 26, 2022	June 8, 2022	July 1, 2022	$0.1885
July 28, 2022	September 6, 2022	October 3, 2022	$0.1885

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Net Sales (Tables)

3 Months Ended

Jul. 31, 2022

Net Sales [Abstract]

Disaggregation of Revenue [Table Text Block]

The following table shows our net sales by geography:

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
United States	$	450	$	482
Developed International1	269		294
Emerging2	150		176
Travel Retail3	21		38
Non-branded and bulk4	16		17
Total	$	906	$	1,007

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 Germany, Australia, the United Kingdom, France, and Canada.

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

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, contract bottling, and bulk whiskey and wine, regardless of customer location.

The following table shows our net sales by product category:

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
Whiskey1	$	616	$	707
Ready-to-Drink2	108		126
Tequila3	73		70
Wine4	53		46
Vodka5	25		23
Non-branded and bulk6	16		17
Rest of portfolio	15		18
Total	$	906	$	1,007

1Includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel's family of brands (excluding the “ready-to-drink” products outlined below), the Woodford Reserve family of brands, the Old Forester family of brands, GlenDronach, Benriach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft.

2Includes the Jack Daniel’s ready-to-drink (RTD) and ready-to-pour (RTP) products, New Mix, and other RTD/RTP products.

3Includes the Herradura family of brands, el Jimador, and other tequilas.

4Includes Korbel California Champagne and Sonoma-Cutrer wines.

5Includes Finlandia.

6Includes net sales of used barrels, contract bottling, and bulk whiskey and wine.

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Pension and Other Postretirement Benefits (Tables)

3 Months Ended

Jul. 31, 2022

Retirement Benefits [Abstract]

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

The following table shows the components of the net cost recognized for our U.S. pension plans. Similar information for other defined benefit plans is not presented due to immateriality.

	Three Months Ended
	July 31,
(Dollars in millions)	2021		2022
Service cost	$	7	$	5
Interest cost	5		8
Expected return on plan assets	(11)		(11)
Amortization of net actuarial loss	6		3
Net cost	$	7	$	5

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Derivative Financial Instruments and Hedging Activities (Tables)

3 Months Ended

Jul. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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

The following table presents 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
		July 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	15	$	14
Net gain (loss) reclassified from AOCI into earnings	Sales	(3)		8
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	2	$	5
Net gain (loss) recognized in earnings	Other income (expense), net	1		1
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	7	$	20
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,183	$	1,288
Other income (expense), net		(6)		6

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, 2022				July 31, 2022
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	32	$	(3)	$	38	$	(3)
Currency derivatives	Other assets	20		(1)		22		—
Not designated as hedges:
Currency derivatives	Accrued expenses	—		(1)		—		—

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, 2022
Derivative assets	$	52	$	(4)	$	48	$	(1)	$	47
Derivative liabilities	(5)		4		(1)		1		—
July 31, 2022
Derivative assets	60		(3)		57		—		57
Derivative liabilities	(3)		3		—		—		—

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Fair Value Measurements (Tables)

3 Months Ended

Jul. 31, 2022

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, 2022				July 31, 2022
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	868	$	868	$	899	$	899
Currency derivatives, net	48		48		57		57
Liabilities
Currency derivatives, net	1		1		—		—
Long-term debt (including current portion)	2,269		2,239		2,248		2,221

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Other Comprehensive Income (Tables)

3 Months Ended

Jul. 31, 2022

Statement of Comprehensive Income [Abstract]

Comprehensive Income (Loss) [Table Text Block]

The following table shows the components of net other comprehensive income (loss):

	Three Months Ended						Three Months Ended
	July 31, 2021						July 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	(8)	$	(2)	$	(10)	$	(1)	$	(4)	$	(5)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	(8)		(2)		(10)		(1)		(4)		(5)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	15		(3)		12		14		(4)		10
Reclassification to earnings1	3		(1)		2		(8)		2		(6)
Other comprehensive income (loss), net	18		(4)		14		6		(2)		4
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	6		(2)		4		3		(1)		2
Other comprehensive income (loss), net	6		(2)		4		3		(1)		2
Total other comprehensive income (loss), net	$	16	$	(8)	$	8	$	8	$	(7)	$	1

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

2Pre-tax amount for each period is classified as non-operating postretirement expense in the accompanying condensed consolidated statements of operations.

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Earnings Per Share [Abstract]
Net income available to common stockholders	$ 249	$ 192
Share data (in thousands):
Basic average common shares outstanding	479,079	478,793
Dilutive effect of stock-based awards	1,365	1,925
Diluted average common shares outstanding	480,444	480,718
Basic earnings per share (dollars per share)	$ 0.52	$ 0.40
Diluted earnings per share (dollars per share)	$ 0.52	$ 0.40

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Earnings Per Share (Details Textual) - shares shares in Thousands	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Earnings Per Share (Textual) [Abstract]
Common stock-based awards excluded from the calculation of diluted earnings per share	913	337

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Inventories (Details) - USD ($) $ in Millions	Jul. 31, 2022	Apr. 30, 2022
Inventories (Textual) [Abstract]
Excess of current costs over stated LIFO value	$ 399	$ 385

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Goodwill and Other Intangible Assets (Details) $ in Millions	3 Months Ended
	Jul. 31, 2022 USD ($)
Goodwill [Roll Forward]
Balance at April 30, 2022	$ 761
Foreign currency translation adjustment	(5)
Balance at July 31, 2022	756
Indefinite-lived Intangible Assets [Roll Forward]
Balance at April 30, 2022	586
Foreign currency translation adjustment	(8)
Balance at July 31, 2022	$ 578

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Debt (Details) € in Millions, £ in Millions, $ in Millions	3 Months Ended
	Jul. 31, 2022 USD ($)	Jul. 31, 2022 EUR (€)	Jul. 31, 2022 GBP (£)	Apr. 30, 2022 USD ($)	Apr. 30, 2022 EUR (€)	Apr. 30, 2022 GBP (£)
Debt Instrument [Line Items]
Long-term debt, including current portion	$ 2,248			$ 2,269
Current portion of long-term debt	250			250
Long-term debt	1,998			2,019
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
Debt Instrument, Interest Rate, Stated Percentage	2.25%	2.25%	2.25%	2.25%	2.25%	2.25%
Long-term debt, including current portion	$ 250			$ 250
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
Debt Instrument, Interest Rate, Stated Percentage	3.50%	3.50%	3.50%	3.50%	3.50%	3.50%
Long-term debt, including current portion	$ 299			$ 298
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
Debt Instrument, Interest Rate, Stated Percentage	1.20%	1.20%	1.20%	1.20%	1.20%	1.20%
Long-term debt, including current portion	$ 305			$ 315
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
Debt Instrument, Interest Rate, Stated Percentage	2.60%	2.60%	2.60%	2.60%	2.60%	2.60%
Long-term debt, including current portion	$ 362			$ 374
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
Debt Instrument, Interest Rate, Stated Percentage	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%
Long-term debt, including current portion	$ 295			$ 295
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
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
Debt Instrument, Interest Rate, Stated Percentage	4.50%	4.50%	4.50%	4.50%	4.50%	4.50%
Long-term debt, including current portion	$ 489			$ 489

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Stockholders' Equity (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Beginning balance	$ 2,737	$ 2,656
Net income	249	192
Net other comprehensive income (loss)	1	8
Declaration of cash dividends	(180)	(172)
Stock-based compensation expense	4	4
Stock issued under compensation plans	4	5
Loss on issuance of treasury stock issued under compensation plans	(8)	(10)
Ending balance	2,807	2,683
Additional Paid-in Capital [Member]
Beginning balance	0	0
Stock-based compensation expense	4	4
Loss on issuance of treasury stock issued under compensation plans	(4)	(2)
Ending balance	0	2
Retained Earnings [Member]
Beginning balance	3,242	3,243
Net income	249	192
Declaration of cash dividends	(180)	(172)
Loss on issuance of treasury stock issued under compensation plans	(4)	(8)
Ending balance	3,307	3,255
AOCI Attributable to Parent [Member]
Beginning balance	(352)	(422)
Net other comprehensive income (loss)	1	8
Ending balance	(351)	(414)
Treasury Stock, Common [Member]
Beginning balance	(225)	(237)
Stock issued under compensation plans	4	5
Ending balance	(221)	(232)
Common stock, Class A, voting [Member] | Common Stock [Member]
Beginning balance	25	25
Ending balance	25	25
Common stock, Class B, nonvoting [Member] | Common Stock [Member]
Beginning balance	47	47
Ending balance	$ 47	$ 47

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Stockholders' Equity Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (352)
Net other comprehensive income (loss)	1	$ 8
Ending balance	(351)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(239)
Net other comprehensive income (loss)	(5)	(10)
Ending balance	(244)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	37
Net other comprehensive income (loss)	4	14
Ending balance	41
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(150)
Net other comprehensive income (loss)	2	4
Ending balance	(148)
AOCI Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net other comprehensive income (loss)	$ 1	$ 8

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Stockholders' Equity Dividends (Details)	3 Months Ended
	Jul. 31, 2022 $ / shares
July 2022 dividend payment
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	May 26, 2022
Dividends Payable, Date of Record	Jun. 08, 2022
Dividends Payable, Date to be Paid	Jul. 01, 2022
Common Stock, Dividends, Per Share, Declared	$ 0.1885
October 2022 dividend payment
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	Jul. 28, 2022
Dividends Payable, Date of Record	Sep. 06, 2022
Dividends Payable, Date to be Paid	Oct. 03, 2022
Common Stock, Dividends, Per Share, Declared	$ 0.1885

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Net Sales by Geography (Details) - USD ($) $ in Millions		3 Months Ended
		Jul. 31, 2022	Jul. 31, 2021
Disaggregation of Revenue [Line Items]
Net sales		$ 1,007	$ 906
United States [Member]
Disaggregation of Revenue [Line Items]
Net sales		482	450
Developed International [Member]
Disaggregation of Revenue [Line Items]
Net sales	[1]	294	269
Emerging [Member]
Disaggregation of Revenue [Line Items]
Net sales	[2]	176	150
Travel Retail [Member]
Disaggregation of Revenue [Line Items]
Net sales	[3]	38	21
Non-branded and bulk [Member]
Disaggregation of Revenue [Line Items]
Net sales	[4]	$ 17	$ 16

[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 Germany, Australia, the United Kingdom, France, and Canada.

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

[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, contract bottling, and bulk whiskey and wine, regardless of customer location.

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Net Sales by Product Category (Details) - USD ($) $ in Millions		3 Months Ended
		Jul. 31, 2022	Jul. 31, 2021
Disaggregation of Revenue [Line Items]
Net sales		$ 1,007	$ 906
Whiskey [Member]
Disaggregation of Revenue [Line Items]
Net sales	[1]	707	616
Ready-to-Drink
Disaggregation of Revenue [Line Items]
Net sales	[2]	126	108
Tequila [Member]
Disaggregation of Revenue [Line Items]
Net sales	[3]	70	73
Wine [Member]
Disaggregation of Revenue [Line Items]
Net sales	[4]	46	53
Vodka [Member]
Disaggregation of Revenue [Line Items]
Net sales	[5]	23	25
Non-branded and bulk [Member]
Disaggregation of Revenue [Line Items]
Net sales	[6]	17	16
Rest of portfolio [Member]
Disaggregation of Revenue [Line Items]
Net sales		$ 18	$ 15

[1] Includes all whiskey spirits and whiskey-based flavored liqueurs. The brands included in this category are the Jack Daniel's family of brands (excluding the “ready-to-drink” products outlined below), the Woodford Reserve family of brands, the Old Forester family of brands, GlenDronach, Benriach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft.

[2] ncludes the Jack Daniel’s ready-to-drink (RTD) and ready-to-pour (RTP) products, New Mix, and other RTD/RTP products.

[3] ncludes the Herradura family of brands, el Jimador, and other tequilas.

[4] Includes Korbel California Champagne and Sonoma-Cutrer wines.

[5] Includes Finlandia.

[6] Includes net sales of used barrels, contract bottling, and bulk whiskey and wine.

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Pension and Other Postretirement Benefits (Details) - Pension Benefits [Member] - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Sponsor Location [Extensible List]
Service cost	$ 5	$ 7
Interest cost	8	5
Expected return on plan assets	(11)	(11)
Amortization of net actuarial loss (gain)	3	6
Net cost	$ 5	$ 7

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Income Taxes (Details)	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Expected Tax Rate on Ordinary Income	24.20%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%
Effective Income Tax Rate Reconciliation, Percent	23.60%	28.50%

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Derivative Financial Instruments and Hedging Activities (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Total amounts presented in the accompanying consolidated statements of operations for line items affected by the net gains (losses) shown above: [Abstract]
Sales	$ 1,288	$ 1,183
Other income (expense), net	6	(6)
Foreign Currency Denominated Debt [Member]
Foreign currency-denominated debt designated as net investment hedge: [Abstract]
Net gain (loss) recognized in AOCI	20	7
Currency derivatives [Member]
Currency derivatives designated as cash flow hedges: [Abstract]
Net gain (loss) recognized in AOCI	14	15
Currency derivatives [Member] | Sales [Member]
Currency derivatives designated as cash flow hedges: [Abstract]
Net gain (loss) reclassified from AOCI into earnings	8	(3)
Currency derivatives not designated as hedging instruments: [Abstract]
Net gain (loss) recognized in earnings	5	2
Currency derivatives [Member] | Other Income [Member]
Currency derivatives not designated as hedging instruments: [Abstract]
Net gain (loss) recognized in earnings	$ 1	$ 1

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Derivative Financial Instruments and Hedging Activities (Details 1) - USD ($) $ in Millions	Jul. 31, 2022	Apr. 30, 2022
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	$ 60	$ 52
Derivative Liability, Fair Value, Gross Liability	3	5
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	38	32
Derivative Liability, Fair Value, Gross Liability	(3)	(3)
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	22	20
Derivative Liability, Fair Value, Gross Liability	0	(1)
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	$ 0	$ (1)

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Derivative Financial Instruments and Hedging Activities (Details Textual) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Jul. 31, 2022	Apr. 30, 2022
Derivative Financial Instruments (Textual) [Abstract]
Maximum term of outstanding derivative contracts	33 months	36 months
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months	$ 31
Aggregate fair value of derivatives with creditworthiness requirements that were in a net liability position	0	$ 0
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Debt Instrument, Face Amount	617	636
Foreign Exchange Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Notional Amount	$ 741	$ 801

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Offsetting Derivative Assets and Liabilities (Details) - USD ($) $ in Millions	Jul. 31, 2022	Apr. 30, 2022
Offsetting Assets and Liabilities [Line Items]
Gross Amount of Derivative Assets	$ 60	$ 52
Gross Amount of Derivative Liabilities Offset Against Derivative Assets in Balance Sheet	(3)	(4)
Net Amount of Derivative Assets Presented in Balance Sheet	57	48
Gross Amount of Derivative Liabilities Not Offset Against Derivative Assets in Balance Sheet	0	(1)
Net Amount of Derivative Assets	57	47
Gross Amount of Derivative Liabilities	(3)	(5)
Gross Amount of Derivative Assets Offset Against Derivative Liabilities in Balance Sheet	3	4
Net Amount of Derivative Liabilities Presented in Balance Sheet	0	1
Gross Amount of Derivative Assets Not Offset Against Derivative Liabilities in Balance Sheet	0	1
Net Amount of Derivative Liabilities	$ 0	$ 0

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Fair Value Measurements (Details) - USD ($) $ in Millions	Jul. 31, 2022	Apr. 30, 2022	Jul. 31, 2021
Assets:
Cash and cash equivalents at end of period	$ 899	$ 868	$ 1,172
Cash and cash equivalents, Fair Value	899	868
Liabilities:
Long-term debt (including current portion), Carrying Amount	2,248	2,269
Fair Value, Inputs, Level 2 [Member]
Assets:
Currency derivatives, net, Fair Value	57	48
Liabilities:
Currency derivatives, net, Fair Value	0	1
Long-term debt (including current portion), Fair Value	2,221	2,239
Foreign Exchange Contract [Member]
Assets:
Currency derivatives, net, Carrying Amount	57	48
Liabilities:
Currency derivatives, net, Carrying Amount	$ 0	$ 1

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Other Comprehensive Income (Details) - USD ($) $ in Millions		3 Months Ended
		Jul. 31, 2022	Jul. 31, 2021
Before Tax:
Net other comprehensive income (loss)		$ 8	$ 16
Tax Effect:
Net other comprehensive income (loss)		(7)	(8)
Net of Tax:
Net other comprehensive income (loss)		1	8
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Before Tax:
Net gain (loss)		(1)	(8)
Reclassification to earnings		0	0
Net other comprehensive income (loss)		(1)	(8)
Tax Effect:
Net gain (loss)		(4)	(2)
Reclassification to earnings		0	0
Net other comprehensive income (loss)		(4)	(2)
Net of Tax:
Net gain (loss)		(5)	(10)
Reclassification to earnings		0	0
Net other comprehensive income (loss)		(5)	(10)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Before Tax:
Net gain (loss)		14	15
Reclassification to earnings	[1]	(8)	3
Net other comprehensive income (loss)		6	18
Tax Effect:
Net gain (loss)		(4)	(3)
Reclassification to earnings	[1]	2	(1)
Net other comprehensive income (loss)		(2)	(4)
Net of Tax:
Net gain (loss)		10	12
Reclassification to earnings	[1]	(6)	2
Net other comprehensive income (loss)		4	14
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Before Tax:
Net gain (loss)		0	0
Reclassification to earnings	[2]	3	6
Net other comprehensive income (loss)		3	6
Tax Effect:
Net gain (loss)		0	0
Reclassification to earnings	[2]	(1)	(2)
Net other comprehensive income (loss)		(1)	(2)
Net of Tax:
Net gain (loss)		0	0
Reclassification to earnings	[2]	2	4
Net other comprehensive income (loss)		$ 2	$ 4

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

[2] Pre-tax amount for each period is classified as non-operating postretirement expense in the accompanying condensed consolidated statements of operations.