Financial Performance - The company reported non-GAAP financial measures to provide a clearer understanding of its performance, including organic net sales and organic operating income adjustments[68]. - Reported net sales for the six months ended October 31, 2022, were $2.1 billion, an increase of 11% compared to the same period last year, driven by higher volumes and favorable price/mix[101]. - Reported operating income for the same period was $656 million, an increase of 8% year-over-year, with diluted earnings per share rising to $0.99, an 11% increase from $0.89[101]. - The effective tax rate decreased to 23.7% from 24.9%, contributing to the increase in diluted earnings per share[103]. - Diluted earnings per share for the six months ended October 31, 2022, increased by 11% to $0.99, compared to $0.89 for the same period last year[139]. - The company expects high-single digit organic net sales growth for fiscal 2023, reflecting stronger consumer demand and easing supply chain constraints[142]. Market and Sales Insights - The company suspended commercial operations in Russia, impacting its market rankings and net sales[79]. - The largest developed international markets include Germany, Australia, the UK, France, and Canada, contributing to the company's net sales[79]. - The United States market reported net sales growth of 11%, driven by higher volumes and favorable mix, with significant contributions from Woodford Reserve and JDTW[107]. - Emerging markets saw a 14% increase in reported net sales, with Brazil leading at 44% growth, driven by higher volumes of JDTW[111]. - Travel Retail channel reported a substantial 60% increase in net sales, reflecting a rebound in travel and an estimated net increase in distributor inventories[112]. Product Performance - The "Ready-to-Drink" product category was introduced as a separate aggregation due to its significant growth contribution in recent years[82]. - Woodford Reserve and Old Forester both reported net sales increases of 39%, driven by higher volumes and estimated net increases in distributor inventories[119]. - New Mix reported a significant net sales growth of 48%, fueled by higher volumes and prices in Mexico[120]. - JDTA experienced a decline in reported net sales of 16% due to lower volumes in the United States and the negative effect of foreign exchange[118]. Cost and Expenses - The reported cost of sales for the six months ended October 31, 2022, was $866 million, an increase of $109 million, or 14% compared to the same period last year[127]. - Gross profit for the six months ended October 31, 2022, was $1.2 billion, an increase of $93 million, or 8% compared to the same period last year[130]. - Total operating expenses for the three months ended October 31, 2022, totaled $300 million, an increase of $32 million, or 12% compared to the same period last year[132]. - Advertising expenses increased by 16% for the three months ended October 31, 2022, primarily due to increased investment in JDTW and the launch of Jack Daniel's Bonded[133]. - SG&A expenses rose by 9% for the three months ended October 31, 2022, driven by higher compensation-related expenses and discretionary spending[133]. - Reported advertising expense increased by 19% for the six months ended October 31, 2022, driven by investments in JDTW, Herradura, and new product launches[134]. Operational Challenges - Supply chain disruptions continued to impact the business, although glass supply improved, and overall logistics challenges constrained product movement[98]. - Foreign exchange fluctuations negatively affected results, particularly due to the strengthening of the U.S. dollar against the euro, Turkish lira, and pound sterling[97]. - The company faced challenges from competition, changing consumer preferences, and potential impacts from geopolitical events, including the situation in Ukraine[100]. Financial Adjustments - The company adjusted its financial measures to exclude the estimated net change in distributor inventories, which reflects actual consumer demand more accurately[76]. - The company reported a focus on organic changes in financial measures to ensure consistent performance evaluation over time[69]. - The company aims to enhance understanding of its historical financial performance through the use of non-GAAP measures[70]. - In the first half of fiscal 2022, the company recognized non-cash impairment charges of $9 million for certain fixed assets, which were excluded from organic results[73]. Capital and Cash Flow - Cash provided by operations for the six months ended October 31, 2022, was $316 million, a decline of $19 million from the previous year[149]. - Cash used for investing activities increased to $58 million during the six months ended October 31, 2022, compared to $35 million in the same period last year[150]. - The company has an $800 million commercial paper program to fund short-term operational needs, with no borrowings outstanding under the credit facility as of October 31, 2022[145]. - Planned capital expenditures for fiscal 2023 are in the range of $190 to $210 million[142].

Financial Performance - Reported net sales for the three months ended July 31, 2022, were $1.0 billion, an increase of 11% compared to the same period last year, driven by higher volumes and favorable price/mix[92] - Reported operating income increased by 19% to $343 million for the three months ended July 31, 2022, with diluted earnings per share rising 30% to $0.52[92] - Reported net sales for the three months ended July 31, 2022, were $1.0 billion, an increase of $101 million, or 11% year-over-year, driven by higher volumes of New Mix, JDTW, and JD RTDs[116] - JDTH reported a 26% increase in net sales, primarily due to volumetric growth in the United States, with a positive impact from an estimated net increase in distributor inventories[108] - Woodford Reserve's net sales increased by 38%, driven by higher volumes and prices in the United States[110] - The gross margin for the period ended July 31, 2022, was 61.8%, an increase of 0.8 percentage points from the prior year, attributed to favorable price/mix and the removal of tariffs on American whiskey[120] - Operating income for the three months ended July 31, 2022, totaled $343 million, reflecting a 19% increase compared to the same period last year[122] - The company anticipates mid-single digit organic net sales growth for fiscal 2023, supported by strong consumer demand[127] - Projected reported gross margin for fiscal 2023 is expected to increase slightly, considering the net effect of inflation and the removal of tariffs[128] - Diluted earnings per share for the three months ended July 31, 2022, were $0.52, a 30% increase from $0.40 in the same period last year[125] - Operating expenses for the three months ended July 31, 2022, totaled $279 million, an increase of 6% year-over-year[121] - The effective tax rate for the three months ended July 31, 2022, was 23.6%, down from 28.5% in the prior year[123] Sales and Market Trends - The company sold its Early Times, Canadian Mist, and Collingwood brands during fiscal 2021, impacting net sales and operating expenses for the first quarter of fiscal 2022[61] - Reported net sales in the Travel Retail channel increased by 77%, driven by higher volumes as travel rebounded from COVID-19 restrictions[103] - Reported net sales in Canada increased by 34%, led by higher volumes of JDTW, with an estimated net increase in distributor inventories positively impacting results[99] - Reported net sales in Germany increased by 13%, fueled by volumetric gains of JDTW and JD RTDs, despite foreign exchange headwinds[99] - Reported net sales in Chile surged by 91%, driven by growth of JDTW and JDTH, with an estimated net increase in distributor inventories positively impacting results[102] Operational Challenges - Supply chain disruptions continued to affect the business, with logistics and transportation challenges increasing input and transportation costs[89] - The strengthening of the U.S. dollar negatively impacted results, particularly against the euro, Turkish lira, pound sterling, and Polish zloty[88] - The company faced substantial competition from new entrants and pricing actions, which could affect future performance[86] - Cash flows were affected by higher levels of inventory due to increased input costs and supply chain disruptions[137] Strategic Initiatives - The company introduced "Ready-to-Drink" as a new brand aggregation due to its growth contribution in recent years[73] - The company uses "organic change" to measure performance, excluding impacts from acquisitions, divestitures, foreign exchange, and impairment charges[64] - The company believes that consumer takeaway data is a leading indicator of consumer demand trends[82] - The company calculates the "estimated net change in distributor inventories" to understand the impact of distributor inventory changes on organic trends[84] - The company emphasizes the importance of understanding fluctuations in distributor inventories, particularly in the U.S. market[67] - The company aims to provide reconciliations of "organic change" to GAAP measures to enhance understanding of financial performance[64] Cash Flow and Liquidity - Cash and cash equivalents were $899 million as of July 31, 2022, with approximately 62% held by foreign subsidiaries[130] - Cash provided by operations was $173 million, a decline of $12 million from the same period last year, primarily due to increased working capital[137] - Cash used for investing activities increased to $34 million during the three months ended July 31, 2022, compared to $15 million for the same period last year, reflecting increased capital spending[138] - Cash used for financing activities was $94 million during the three months ended July 31, 2022, a decrease of $47 million from $141 million in the same period last year[139] - The company has an $800 million commercial paper program with no borrowings under the program as of April 30, 2022, and July 31, 2022[131] - The company expects to meet planned short-term liquidity needs largely through cash generated from operations and borrowings under the commercial paper program[135] - The company believes its current liquidity position and ability to generate positive cash flows will be sufficient to meet future financial commitments[136] - Significant short-term cash requirements include funding operations, repayment of a note maturing in 2023, and capital investments[134] Risk Management - The company has suspended commercial operations in Russia, which is no longer considered one of its largest markets[70] - The company faces market risks from changes in foreign currency exchange rates, commodity prices, and interest rates, managed through procurement strategies and financial instruments[141] - The company reported a non-cash impairment charge of $6 million for certain fixed assets during the first quarter of fiscal 2022[63]

United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ | --- | --- | |------------------------------------------|--------------------------------------------------------| | | | ...

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 October 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ | --- | --- | |--------------------------------------------------------|---------------------| | | | | Commission File No ...

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, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ | --- | --- | |--------------------------------------------------------|---------------------| | | | | Commission File No. | ...

United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ | --- | --- | |------------------------------------------------------------------|-----------------------------------| | ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Brown-Forman Corporation for the three and six months ended October 31, 2020 [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended October 31, 2020, net sales slightly decreased to $1,738 million, while operating income increased to $717 million due to a $127 million gain on sale of a business Condensed Consolidated Statements of Operations (Six Months Ended Oct 31) | Financial Metric | 2019 (in millions) | 2020 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,755 | $1,738 | -1.0% | | Gross Profit | $1,117 | $1,046 | -6.4% | | Operating Income | $600 | $717 | +19.5% | | Net Income | $468 | $564 | +20.5% | | Diluted EPS | $0.97 | $1.17 | +20.6% | - A significant pre-tax gain of **$127 million** was recognized from the sale of a business during the six months ended October 31, 2020, which substantially boosted operating and net income[6](index=6&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of October 31, 2020, total assets increased to $6,350 million, driven by a rise in cash and accounts receivable, while total liabilities and stockholders' equity also grew Balance Sheet Summary (as of Oct 31, 2020 vs. Apr 30, 2020) | Account | April 30, 2020 (in millions) | October 31, 2020 (in millions) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $675 | $964 | | Total current assets | $3,265 | $3,815 | | Total assets | $5,766 | $6,350 | | **Liabilities & Equity** | | | | Total current liabilities | $880 | $1,022 | | Long-term debt | $2,269 | $2,309 | | Total liabilities | $3,791 | $3,947 | | Total stockholders' equity | $1,975 | $2,403 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended October 31, 2020, cash provided by operating activities was $283 million, with a net increase in cash and cash equivalents of $289 million Cash Flow Summary (Six Months Ended Oct 31, 2020) | Cash Flow Activity | Amount (in millions) | | :--- | :--- | | Cash provided by operating activities | $283 | | Cash provided by investing activities | $147 | | Cash used for financing activities | ($155) | | **Net increase in cash** | **$289** | - The primary source of cash from investing activities was the **$177 million** in proceeds from the sale of a business[14](index=14&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail financial statements, including net sales by geography and product, the $127 million gain from brand sales, debt structure, and derivative use for hedging - On July 31, 2020, the company sold the Early Times, Canadian Mist, and Collingwood brands for **$177 million** in cash, resulting in a pre-tax gain of **$127 million**, aligning with a focus on premium spirits[68](index=68&type=chunk) Net Sales by Geography (Six Months Ended Oct 31) | Geography | 2019 (in millions) | 2020 (in millions) | | :--- | :--- | :--- | | United States | $880 | $909 | | Developed International | $453 | $497 | | Emerging | $306 | $267 | | Travel Retail | $70 | $35 | | **Total** | **$1,755** | **$1,738** | Net Sales by Product Category (Six Months Ended Oct 31) | Product Category | 2019 (in millions) | 2020 (in millions) | | :--- | :--- | :--- | | Whiskey | $1,385 | $1,370 | | Tequila | $145 | $152 | | Wine | $97 | $112 | | Vodka | $57 | $45 | | **Total** | **$1,755** | **$1,738** | - The Board of Directors increased the quarterly cash dividend from **$0.1743** to **$0.1795** per share, payable on January 4, 2021[34](index=34&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results, highlighting underlying net sales growth driven by off-premise and e-premise performance, strong liquidity, and operational adjustments due to COVID-19 [Overview](index=24&type=section&id=Overview) For the first half of fiscal 2021, reported net sales decreased 1% to $1.7 billion, while underlying net sales grew 4%, with operating income rising 19% to $717 million due to a brand divestiture gain - The financial impact of COVID-19 was mixed: negative effects on the on-premise (nearly **20% of business**) and Travel Retail channels were offset by solid off-premise gains and growth in the e-premise channel due to increased at-home consumption[94](index=94&type=chunk) Fiscal 2021 Year-to-Date Highlights (Six Months Ended Oct 31, 2020) | Metric | Value | Change vs. Prior Year | | :--- | :--- | :--- | | Reported Net Sales | $1.7 billion | -1% | | Underlying Net Sales | - | +4% | | Reported Operating Income | $717 million | +19% | | Underlying Operating Income | - | +11% | | Diluted EPS | $1.17 | +20% | [Fiscal 2021 Outlook](index=25&type=section&id=Fiscal%202021%20Outlook) Due to COVID-19 uncertainties, the company is not providing quantitative guidance for fiscal 2021, anticipating no recovery in Travel Retail and on-premise channels, and expecting gross margin pressure and accelerated operating expenses - The company is not providing quantitative guidance for fiscal 2021 due to uncertainties related to COVID-19[101](index=101&type=chunk) - Key qualitative expectations for fiscal 2021 include: - No recovery in the Travel Retail and on-premise channels[101](index=101&type=chunk) - Continued pressure on gross margin due to higher input costs and mix shifts[102](index=102&type=chunk) - Significant acceleration in operating expenses, especially advertising, in the second half[102](index=102&type=chunk) - A planned **$20 million** contribution to the Brown-Forman Foundation[102](index=102&type=chunk) - The expected full-year effective tax rate for fiscal 2021 is projected to be in the range of **17% to 19%**[103](index=103&type=chunk) [Results of Operations – Fiscal 2021 Year-to-Date Highlights](index=26&type=section&id=Results%20of%20Operations%20%E2%80%93%20Fiscal%202021%20Year-to-Date%20Highlights) For the first half of fiscal 2021, underlying net sales grew in the U.S. and Developed International markets, driven by premium bourbons and RTDs, offsetting a decline in Jack Daniel's Tennessee Whiskey Underlying Net Sales % Change by Market (Six Months Ended Oct 31, 2020) | Market | Underlying Change | | :--- | :--- | | United States | 9% | | Developed International | 10% | | Emerging | 0% | | Travel Retail | -59% | | Non-branded and bulk | -33% | Underlying Net Sales % Change by Brand (Six Months Ended Oct 31, 2020) | Brand/Category | Underlying Change | | :--- | :--- | | Jack Daniel's Tennessee Whiskey | -7% | | Jack Daniel's RTD/RTP | 34% | | Woodford Reserve | 19% | | Tequila (Portfolio) | 13% | | Vodka (Finlandia) | -20% | [Liquidity and Financial Condition](index=33&type=section&id=Liquidity%20and%20Financial%20Condition) The company maintains a strong liquidity position, with cash and cash equivalents increasing by $289 million to $964 million, supported by an $800 million commercial paper program and undrawn bank credit facility - Cash and cash equivalents increased by **$289 million** to end the period at **$964 million**[146](index=146&type=chunk)[151](index=151&type=chunk) - The company has an **$800 million** commercial paper program, supported by an undrawn **$800 million** bank credit facility expiring in November 2023, ensuring financial flexibility[153](index=153&type=chunk)[154](index=154&type=chunk) - To preserve liquidity during the COVID-19 crisis, the company has closely managed operating expenses, limited discretionary spending, and re-prioritized capital projects[150](index=150&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages market risks from foreign currency, commodity prices, and interest rates through derivatives and procurement strategies, with no material changes since April 30, 2020 - The company identifies its primary market risks as fluctuations in foreign currency exchange rates, commodity prices, and interest rates, using derivatives and other financial instruments to mitigate these exposures[157](index=157&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the last fiscal quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective[158](index=158&type=chunk) - No changes have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the last fiscal quarter[159](index=159&type=chunk) [PART II - OTHER INFORMATION](index=35&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company operates in a litigious environment but does not anticipate any pending legal proceedings will have a material adverse effect on its financial position, operations, or liquidity - The company does not expect any pending legal proceedings to have a material adverse effect on its financial condition or results[160](index=160&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for fiscal year 2020 and the Quarterly Report for the first quarter of fiscal 2021 - No material changes have been made to the risk factors disclosed in the 2020 Form 10-K and the Q1 2021 Form 10-Q[161](index=161&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[162](index=162&type=chunk) [Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act and the financial statements in Inline XBRL format Filed Exhibits | Exhibit | Description | | :--- | :--- | | 31.1 | CEO Certification (Section 302) | | 31.2 | CFO Certification (Section 302) | | 32 | CEO and CFO Certification (Section 906) | | 101 | Inline XBRL Financial Statements | | 104 | Cover Page Interactive Data File |

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, 2020 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 61-01 ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Brown-Forman is a 150-year-old American-owned spirits and wine company with global operations, centered on the Jack Daniel's brand family - Founded in 1870, Brown-Forman is the largest American-owned spirits and wine company with global reach, employing approximately **4,800 people** on six continents[7](index=7&type=chunk) - The company is a "controlled company" as the Brown family owns over **50%** of the voting stock and economic ownership[7](index=7&type=chunk) - The Jack Daniel's brand family is the company's most valuable asset, with Jack Daniel's Tennessee Whiskey being the largest American whiskey brand globally[9](index=9&type=chunk)[35](index=35&type=chunk) Principal Brands Portfolio | Category | Brands | | :--- | :--- | | **American Whiskey** | Jack Daniel's Family (Tennessee Whiskey, Honey, Fire, Apple, etc.), Woodford Reserve, Old Forester, Coopers' Craft, Early Times | | **Tequila** | Herradura, el Jimador, Pepe Lopez, Antiguo | | **Scotch & Irish Whiskey** | GlenDronach, BenRiach, Glenglassaugh, Slane Irish Whiskey | | **Other Spirits & Wine** | Finlandia Vodkas, Korbel California Champagnes, Sonoma-Cutrer Wines, Chambord Liqueur, Fords Gin | Net Sales by Geographic Area | Geographic Area | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | | United States | 47% | 47% | 50% | | United Kingdom | 6% | 6% | 5% | | Germany | 5% | 5% | 5% | | Australia | 5% | 5% | 5% | | Mexico | 5% | 5% | 5% | | Other | 32% | 32% | 30% | - The company's two largest customers, Republic National Distributing Company and Breakthru Beverage Group, accounted for approximately **18%** and **13%** of consolidated net sales in 2020, respectively[17](index=17&type=chunk) - The company's integrated strategy focuses on its portfolio, geography, people, and investments, guided by core values and a commitment to sustainability and diversity[28](index=28&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from health pandemics, global trade policies, brand dependence, evolving consumer preferences, supply chain disruptions, and cybersecurity threats - **COVID-19 Pandemic:** The pandemic poses risks of global recession, demand volatility, supply chain disruptions, and changes in consumer behavior, including liquor sale bans[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - **Global & Political Risks:** The company faces risks from trade policies like retaliatory tariffs on American whiskey, which have negatively impacted net sales and cost of sales, with potential for increased tariffs by June 2021[64](index=64&type=chunk)[65](index=65&type=chunk) - **Brand Dependence:** Performance is substantially dependent on the Jack Daniel's brand family; a decline in its volume or reputation would adversely affect financial results[77](index=77&type=chunk) - **Consumer Preferences & Competition:** The business is vulnerable to shifts in consumer preferences and increased competition from a growing number of small, local distilleries, particularly in the U.S[78](index=78&type=chunk)[79](index=79&type=chunk) - **Supply Chain & Forecasting:** Risks include production disruptions, imprecise forecasting for aged products, and higher costs or unavailability of key raw materials like American white oak, agave, and glass[83](index=83&type=chunk)[85](index=85&type=chunk)[87](index=87&type=chunk) - **Cybersecurity & Data Privacy:** Cyber breaches or IT system failures could cause business interruptions and reputational harm, compounded by increasingly stringent data protection laws like GDPR and CCPA[110](index=110&type=chunk)[111](index=111&type=chunk)[113](index=113&type=chunk) - **Family Control:** The Brown family's majority voting stock control provides long-term focus but may not always align with other stockholders' interests and could deter takeovers[117](index=117&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) [Unresolved Staff Comments](index=32&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[121](index=121&type=chunk) [Properties](index=33&type=section&id=Item%202.%20Properties) The company owns significant production facilities, including distilleries, a winery, bottling plants, and cooperages, primarily in the United States, Canada, Mexico, France, Ireland, and Scotland Significant Owned Properties | Location | Principal Activities | | :--- | :--- | | Louisville, Kentucky | Corporate offices, Distilling (Old Forester), Cooperage | | Lynchburg, Tennessee | Distilling, bottling, warehousing (Jack Daniel's) | | Woodford County, Kentucky | Distilling, bottling, warehousing (Woodford Reserve) | | Windsor, California | Vineyards, winery, bottling (Sonoma-Cutrer) | | Amatitán, Mexico | Distilling, bottling, warehousing (Tequila brands) | | Aberdeenshire, Scotland | Distilling, warehousing (Glendronach) | | Morayshire, Scotland | Distilling, warehousing (BenRiach) | [Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in litigation in the normal course of business but does not anticipate any pending suits will have a material adverse effect on its financial position, results of operations, or liquidity - The company does not expect any pending legal proceedings to have a material adverse effect on its financial position, results, or liquidity[127](index=127&type=chunk) [Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[128](index=128&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=34&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A and B common stock trade on the NYSE, with details on equity compensation plans and a five-year stock performance graph included - Class A (BFA) and Class B (BFB) common stock are traded on the NYSE, with **2,552** holders of Class A and **5,127** holders of Class B stock as of May 31, 2020[128](index=128&type=chunk) Equity Compensation Plan Information as of April 30, 2020 | Plan Category | Number of Securities to Be Issued Upon Exercise | Weighted-Average Exercise Price | Number of Securities Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by Class A common stockholders | 2,438,446 | $38.19 | 13,513,565 | [Selected Financial Data](index=37&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of key financial data, including fiscal 2020 net sales of **$3,363 million** and net income of **$827 million** Selected Financial Data (Fiscal Years 2018-2020) | (In millions, except per share data) | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | | Net sales | $3,248 | $3,324 | $3,363 | | Gross profit | $2,202 | $2,166 | $2,127 | | Operating income | $1,048 | $1,144 | $1,091 | | Net income | $717 | $835 | $827 | | Diluted EPS | $1.48 | $1.73 | $1.72 | | Gross margin | 67.8% | 65.2% | 63.2% | | Operating margin | 32.3% | 34.4% | 32.4% | | Cash provided by operations | $653 | $800 | $724 | | Total assets (at year-end) | $4,976 | $5,139 | $5,766 | | Total debt (at year-end) | $2,556 | $2,440 | $2,602 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=38&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2020 saw **1%** reported net sales growth to **$3.4 billion** but flat underlying sales, impacted by COVID-19, tariffs, and higher input costs, leading to a **5%** operating income decline [Significant Developments](index=41&type=section&id=Significant%20Developments) Fiscal 2020 saw significant developments including COVID-19 impacts, ongoing tariffs, the launch of Jack Daniel's Tennessee Apple, the acquisition of Fords Gin, and **$230 million** in capital investments - **COVID-19 Impact:** The pandemic negatively affected results starting in Q4 2020, with on-premise and Travel Retail channels nearly halting, partially offset by strong off-premise and e-premise growth[159](index=159&type=chunk) - **Tariffs:** Retaliatory tariffs continued to negatively affect results in fiscal 2020 by lowering net sales and increasing cost of sales[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) - **Innovation & Acquisition:** The company launched Jack Daniel's Tennessee Apple in fiscal 2020 and acquired Fords Gin in July 2019 for **$22 million** in cash[165](index=165&type=chunk)[166](index=166&type=chunk) - **Capital Deployment:** Over fiscal 2019-2020, the company invested approximately **$230 million** in capital expenditures, primarily for whiskey production, and returned **$0.8 billion** to stockholders via dividends and share repurchases[167](index=167&type=chunk)[169](index=169&type=chunk) [Executive Summary](index=43&type=section&id=Executive%20Summary) Fiscal 2020 reported net sales rose **1%** to **$3.4 billion**, but underlying sales were flat, with operating income down **5%** due to COVID-19, and no quantitative guidance for fiscal 2021 Fiscal 2020 vs. 2019 Performance Summary | Metric | FY 2020 | FY 2019 | Reported Change | Underlying Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $3,363M | $3,324M | +1% | 0% | | Gross Profit | $2,127M | $2,166M | -2% | -3% | | Operating Income | $1,091M | $1,144M | -5% | -6% | | Diluted EPS | $1.72 | $1.73 | -1% | N/A | - Due to substantial uncertainty from the COVID-19 pandemic, the company is not providing quantitative guidance for fiscal 2021[179](index=179&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Fiscal 2020 saw **5%** underlying net sales growth in the U.S., offset by declines in international and Travel Retail markets due to COVID-19, with gross margin compressed by **2.0 percentage points** due to higher input costs and tariffs FY2020 Underlying Net Sales Growth by Market | Geographic Area | % of Net Sales | Underlying Change vs. 2019 | | :--- | :--- | :--- | | United States | 50% | +5% | | Developed International | 27% | -1% | | Emerging | 17% | -1% | | Travel Retail | 4% | -10% | | Non-branded and bulk | 2% | -29% | | **Total** | **100%** | **0%** | FY2020 Underlying Net Sales Growth by Brand | Brand Family / Brand | Underlying Change vs. 2019 | | :--- | :--- | | Jack Daniel's family of brands | 0% | | - JDTW | -4% | | - JD RTD/RTP | +7% | | - Other Jack Daniel's (incl. Apple) | +41% | | Woodford Reserve | +19% | | Tequila (el Jimador & Herradura) | +2% | | Vodka (Finlandia) | -12% | - Gross margin decreased by **2.0 percentage points** to **63.2%** in fiscal 2020, driven by higher input costs and tariff-related costs[226](index=226&type=chunk) - Operating income decreased **5%** to **$1.1 billion**, with underlying operating income declining **6%**, reflecting lower gross profit and a **1%** increase in underlying SG&A expenses[232](index=232&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, with cash increasing by **$368 million** to **$675 million** in fiscal 2020, supported by robust cash from operations and an **$800 million** undrawn credit facility Cash Flow Summary (in millions) | Activity | FY 2020 | FY 2019 | | :--- | :--- | :--- | | Cash from Operating Activities | $724 | $800 | | Cash for Investing Activities | ($141) | ($119) | | Cash for Financing Activities | ($191) | ($599) | | **Net Increase in Cash** | **$368** | **$68** | - The company has an **$800 million** commercial paper program, supported by an undrawn **$800 million** bank credit facility expiring in November 2023[247](index=247&type=chunk) - To preserve liquidity during the COVID-19 crisis, the company has managed operating expenses, re-prioritized capital projects, and actively managed working capital[243](index=243&type=chunk) [Critical Accounting Policies and Estimates](index=54&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies involve significant management judgment, particularly for goodwill and intangible assets, pension benefits, and income taxes, including a **$13 million** impairment charge for the Chambord brand in Q4 2020 - A non-cash impairment charge of **$13 million** was recognized for the Chambord brand name in Q4 2020 due to a weakened outlook from COVID-19's impact on the on-premise channel, with a remaining carrying amount of **$104 million**[260](index=260&type=chunk)[337](index=337&type=chunk) - The fair values of goodwill and other intangible assets are estimated to substantially exceed their carrying amounts, with the exception of the Chambord brand name[259](index=259&type=chunk) - Pension and other postretirement benefit costs are sensitive to changes in assumptions; a **50 basis point** change in the discount rate would alter the fiscal 2021 cost by approximately **$5 million**[265](index=265&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates, commodity prices, and interest rates, managed through derivative contracts and procurement strategies - The company's most significant foreign currency exposures are to the euro, British pound, Australian dollar, Polish zloty, Mexican peso, and Russian ruble[270](index=270&type=chunk) - As of April 30, 2020, the company had outstanding currency derivatives with notional amounts totaling **$1,026 million** to manage foreign currency exposures[270](index=270&type=chunk) - Commodity price exposures include corn, malted barley, rye, natural gas, agave, and wood, managed through purchase orders and long-term supply contracts[272](index=272&type=chunk) [Financial Statements and Supplementary Data](index=58&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for fiscal year 2020, including reports from management and PricewaterhouseCoopers LLP, highlighting **$3,363 million** in net sales and a **$13 million** Chambord brand impairment Consolidated Statement of Operations Highlights (FY 2020) | (In millions) | Amount | | :--- | :--- | | Net Sales | $3,363 | | Gross Profit | $2,127 | | Operating Income | $1,091 | | **Net Income** | **$827** | Consolidated Balance Sheet Highlights (as of April 30, 2020) | (In millions) | Amount | | :--- | :--- | | Total Current Assets | $3,265 | | Total Assets | $5,766 | | Total Current Liabilities | $880 | | Long-Term Debt | $2,269 | | Total Liabilities | $3,791 | | Total Stockholders' Equity | $1,975 | - PricewaterhouseCoopers LLP issued an unqualified opinion on the financial statements and internal control effectiveness, highlighting the quantitative impairment assessment of brand name intangible assets as a critical audit matter[283](index=283&type=chunk)[284](index=284&type=chunk)[292](index=292&type=chunk) - Subsequent to year-end, on June 12, 2020, the company agreed to sell the Early Times, Canadian Mist, and Collingwood brands to Sazerac Company, with closing expected by October 31, 2020[446](index=446&type=chunk) [Controls and Procedures](index=97&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as effective, with no material changes to internal control over financial reporting during Q4 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of fiscal 2020[451](index=451&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended April 30, 2020[452](index=452&type=chunk) Part III [Directors, Executive Compensation, and Corporate Governance](index=97&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) This part incorporates information by reference from the company's definitive proxy statement for the Annual Meeting of Stockholders, covering directors, executive compensation, security ownership, related transactions, and accounting fees - Information regarding Directors, Executive Officers, and Corporate Governance (Item 10) is incorporated by reference from the company's proxy statement[454](index=454&type=chunk) - Details on Executive Compensation (Item 11) are incorporated by reference from the proxy statement[455](index=455&type=chunk) - Information on Security Ownership (Item 12) and Certain Relationships and Related Transactions (Item 13) is incorporated by reference from the proxy statement[456](index=456&type=chunk)[457](index=457&type=chunk) - Information on Principal Accounting Fees and Services (Item 14) is incorporated by reference from the proxy statement[458](index=458&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=98&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits filed with the Form 10-K, including descriptions of common stock, subsidiary lists, auditor consent, and CEO/CFO certifications - The report includes Financial Statement Schedule II – Valuation and Qualifying Accounts[458](index=458&type=chunk) - Filed exhibits include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and financial data in Inline XBRL format[459](index=459&type=chunk) [Form 10-K Summary](index=100&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports that there is no Form 10-K summary - None[463](index=463&type=chunk)

United States Securities and Exchange Commission Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2020 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) (State or ...