10-Q

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended January 31, 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: February 28, 2022

Class A Common Stock (voting), $0.15 par value	169,175,352
Class B Common Stock (nonvoting), $0.15 par value	309,795,475

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	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	35
PART II - OTHER INFORMATION		36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36
SIGNATURES		37

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in millions, except per share amounts)

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
	2021		2022		2021		2022
Sales	$	1,222	$	1,365	$	3,481	$	3,831
Excise taxes	311		328		832		894
Net sales	911		1,037		2,649		2,937
Cost of sales	361		415		1,053		1,172
Gross profit	550		622		1,596		1,765
Advertising expenses	121		117		278		311
Selling, general, and administrative expenses	157		162		460		495
Gain on sale of business	—		—		(127)		—
Other expense (income), net	(9)		(4)		(13)		1
Operating income	281		347		998		958
Non-operating postretirement expense	1		—		4		2
Interest income	—		(1)		(1)		(3)
Interest expense	21		20		61		61
Income before income taxes	259		328		934		898
Income taxes	40		69		151		211
Net income	$	219	$	259	$	783	$	687
Earnings per share:
Basic	$	0.46	$	0.54	$	1.64	$	1.43
Diluted	$	0.45	$	0.54	$	1.63	$	1.43

See notes to the condensed consolidated financial statements.

3

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in millions)

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
	2021		2022		2021		2022
Net income	$	219	$	259	$	783	$	687
Other comprehensive income (loss), net of tax:
Currency translation adjustments	47		(27)		113		(49)
Cash flow hedge adjustments	(33)		16		(72)		40
Postretirement benefits adjustments	5		5		17		13
Net other comprehensive income (loss)	19		(6)		58		4
Comprehensive income	$	238	$	253	$	841	$	691

See notes to the condensed consolidated financial statements.

4

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in millions)

	April 30, 2021		January 31, 2022
Assets
Cash and cash equivalents	$	1,150	$	812
Accounts receivable, less allowance for doubtful accounts of $7 at April 30 and $6 at January 31	753		796
Inventories:
Barreled whiskey	1,101		1,126
Finished goods	323		302
Work in process	199		220
Raw materials and supplies	128		121
Total inventories	1,751		1,769
Other current assets	263		276
Total current assets	3,917		3,653
Property, plant and equipment, net	832		818
Goodwill	779		771
Other intangible assets	676		652
Deferred tax assets	70		67
Other assets	248		265
Total assets	$	6,522	$	6,226
Liabilities
Accounts payable and accrued expenses	$	679	$	629
Dividends payable	—		90
Accrued income taxes	34		64
Short-term borrowings	205		16
Current portion of long-term debt	—		250
Total current liabilities	918		1,049
Long-term debt	2,354		2,061
Deferred tax liabilities	169		190
Accrued pension and other postretirement benefits	219		216
Other liabilities	206		191
Total liabilities	3,866		3,707
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
Additional paid-in capital	—		3
Retained earnings	3,243		3,091
Accumulated other comprehensive income (loss), net of tax	(422)		(418)
Treasury stock, at cost (5,803,000 and 5,613,000 shares at April 30 and January 31, respectively)	(237)		(229)
Total stockholders’ equity	2,656		2,519
Total liabilities and stockholders’ equity	$	6,522	$	6,226

 See notes to the condensed consolidated financial statements.

5

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in millions)

	Nine Months Ended
	January 31,
	2021		2022
Cash flows from operating activities:
Net income	$	783	$	687
Adjustments to reconcile net income to net cash provided by operations:
Gain on sale of business	(127)		—
Non-cash asset write-downs	—		9
Depreciation and amortization	58		60
Stock-based compensation expense	9		11
Deferred income tax provision (benefit)	(56)		(3)
Other, net	(15)		15
Changes in assets and liabilities, excluding the effects of sale of business:
Accounts receivable	(219)		(59)
Inventories	(14)		(33)
Other current assets	30		—
Accounts payable and accrued expenses	68		(32)
Accrued income taxes	16		30
Other operating assets and liabilities	39		(2)
Cash provided by operating activities	572		683
Cash flows from investing activities:
Proceeds from sale of business	177		—
Proceeds from sale of property, plant, and equipment	—		2
Acquisition of business, net of cash acquired	(14)		—
Additions to property, plant, and equipment	(41)		(62)
Computer software expenditures	(2)		(3)
Cash provided by (used for) investing activities	120		(63)
Cash flows from financing activities:
Proceeds from short-term borrowings, maturities greater than 90 days	344		—
Repayments of short-term borrowings, maturities greater than 90 days	(342)		—
Net change in short-term borrowings, maturities of 90 days or less	(25)		(181)
Payments of withholding taxes related to stock-based awards	(18)		(8)
Dividends paid	(253)		(741)
Cash used for financing activities	(294)		(930)
Effect of exchange rate changes on cash and cash equivalents	33		(28)
Net increase (decrease) in cash and cash equivalents	431		(338)
Cash and cash equivalents, beginning of period	675		1,150
Cash and cash equivalents, end of period	$	1,106	$	812

See notes to the condensed consolidated financial statements.

6

BROWN-FORMAN CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

1.    Condensed Consolidated Financial Statements 

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

We suggest that you read these condensed financial statements together with the financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2021 (2021 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our 2021 Form 10-K.

2.    Earnings Per Share 

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

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

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions, except per share amounts)	2021		2022		2021		2022
Net income available to common stockholders	$	219	$	259	$	783	$	687
Share data (in thousands):
Basic average common shares outstanding	478,599		478,887		478,471		478,844
Dilutive effect of stock-based awards	2,237		1,680		2,194		1,755
Diluted average common shares outstanding	480,836		480,567		480,665		480,599
Basic earnings per share	$	0.46	$	0.54	$	1.64	$	1.43
Diluted earnings per share	$	0.45	$	0.54	$	1.63	$	1.43

We excluded common stock-based awards for approximately 298,000 shares and 789,000 shares from the calculation of diluted earnings per share for the three months ended January 31, 2021 and 2022, respectively. We excluded common stock-based awards for approximately 211,000 shares and 623,000 shares from the calculation of diluted earnings per share for the nine months ended January 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 $353 million higher than reported as of April 30, 2021, and $388 million higher than reported as of January 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 nine months ended January 31, 2022:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2021	$	779	$	676
Foreign currency translation adjustment	(8)		(24)
Balance at January 31, 2022	$	771	$	652

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

5.    Commitments and Contingencies

We operate in a litigious environment, and we are sued in the normal course of business. Sometimes plaintiffs seek substantial damages. Significant judgment is required in predicting the outcome of these suits and claims, many of which take years to adjudicate. We accrue estimated costs for a contingency when we believe that a loss is probable and we can make a reasonable estimate of the loss, and then adjust the accrual as appropriate to reflect changes in facts and circumstances. We do not believe it is reasonably possible that these existing loss contingencies, individually or in the aggregate, would have a material adverse effect on our financial position, results of operations, or liquidity. No material accrued loss contingencies were recorded as of January 31, 2022.

We have guaranteed the repayment by a third-party importer of its obligation under a bank credit facility that it uses in connection with its importation of our products in Russia. If the importer were to default on that obligation, which we believe is unlikely, our maximum possible exposure under the existing terms of the guaranty would be approximately $11 million (subject to changes in foreign currency exchange rates). Both the fair value and carrying amount of the guaranty are insignificant. As of January 31, 2022, our actual exposure under the guaranty of the importer’s obligation was approximately $4 million. We also have accounts receivable from that importer of approximately $9 million at January 31, 2022, which we expect to collect in full. Based on the financial support we provide to the importer, we believe it meets the definition of a variable interest entity. However, because we do not control this entity, it is not included in our consolidated financial statements.

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

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

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

Since it was raised, we have disputed Bacardi’s claim of commercial agency compensation and issued a demand that Bacardi adhere to the dispute resolution process mandated by the Agreement. The ruling for the Commercial Court Action was issued on May 19, 2021, in which the Court declined to order Bacardi to return the amounts withheld pending the outcome of the Arbitration. The Arbitration took place the week of July 12, 2021, and the decision was rendered December 8, 2021. The decision confirmed that Bacardi was not entitled to compensation as a commercial agent but was awarded an immaterial amount for its work in winding up the business. In December 2021, Bacardi remitted £47 million related to this matter.

8

6.    Debt

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

(Principal and carrying amounts in millions)	April 30, 2021		January 31, 2022
2.250% senior notes, $250 principal amount, due January 15, 2023	$	249	$	250
3.500% senior notes, $300 principal amount, due April 15, 2025	298		298
1.200% senior notes, €300 principal amount, due July 7, 2026	362		333
2.600% senior notes, £300 principal amount, due July 7, 2028	415		399
4.000% senior notes, $300 principal amount, due April 15, 2038	294		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	488		488
	2,354		2,311
Less current portion	—		250
	$	2,354	$	2,061

Our short-term borrowings of $205 million as of April 30, 2021 included of $195 million of borrowings under our commercial paper program. There were no borrowings under that program as of January 31, 2022.

(Dollars in millions)	April 30, 2021	January 31, 2022
Commercial paper	$195	$—
Average interest rate	0.16%	—%
Average remaining days to maturity	24	0

9

7.    Stockholders’ Equity

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

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

10

The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 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, 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
Net income							236						236
Net other comprehensive income (loss)									2				2
Stock-based compensation expense					3								3
Stock issued under compensation plans											1		1
Loss on issuance of treasury stock issued under compensation plans					(2)								(2)
Balance at October 31, 2021	25		47		3		3,491		(412)		(231)		2,923
Net income							259						259
Net other comprehensive income (loss)									(6)				(6)
Declaration of cash dividends							(659)						(659)
Stock-based compensation expense					4								4
Stock issued under compensation plans											2		2
Loss on issuance of treasury stock issued under compensation plans					(4)								(4)
Balance at January 31, 2022	$	25	$	47	$	3	$	3,091	$	(418)	$	(229)	$	2,519

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

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2021	$	(179)	$	(16)	$	(227)	$	(422)
Net other comprehensive income (loss)	(49)		40		13		4
Balance at January 31, 2022	$	(228)	$	24	$	(214)	$	(418)

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

Declaration Date	Record Date	Payable Date	Amount per Share
May 27, 2021	June 8, 2021	July 1, 2021	$0.1795
July 22, 2021	September 3, 2021	October 1, 2021	$0.1795
November 18, 2021	December 3, 2021	December 28, 2021	$0.1885
November 18, 2021	December 9, 2021	December 29, 2021	$1.0000
January 25, 2022	March 8, 2022	April 1, 2022	$0.1885

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8.    Net Sales 

The following table shows our net sales by geography:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
United States	$	425	$	488	$	1,334	$	1,400
Developed International1	292		318		789		884
Emerging2	171		196		438		533
Travel Retail3	12		25		47		74
Non-branded & bulk4	11		10		41		46
Total	$	911	$	1,037	$	2,649	$	2,937

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 Australia, Germany, 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 Russia.

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

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

The following table shows our net sales by product category:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
Whiskey1	$	731	$	835	$	2,101	$	2,309
Tequila2	72		90		224		266
Wine3	50		54		162		176
Vodka4	26		29		71		86
Non-branded and bulk5	11		10		41		46
Rest of portfolio	21		19		50		54
Total	$	911	$	1,037	$	2,649	$	2,937

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

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

3Includes Korbel Champagne and Sonoma-Cutrer wines.

4Includes Finlandia.

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

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9.    Pension and Other Postretirement Benefits

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

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
Pension Benefits:
Service cost	$	7	$	7	$	20	$	20
Interest cost	6		5		19		16
Expected return on plan assets	(12)		(11)		(35)		(34)
Amortization of:
Prior service cost (credit)	—		—		1		1
Net actuarial loss	7		6		20		18
Settlement charge	—		—		—		1
Net cost	$	8	$	7	$	25	$	22
Other Postretirement Benefits:
Service cost	$	—	$	—	$	1	$	1
Interest cost	1		—		1		1
Amortization of prior service cost (credit)	(1)		—		(2)		(1)
Net cost	$	—	$	—	$	—	$	1

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 22.7%, which is greater than the U.S. federal statutory rate of 21.0%, due to (a) state income taxes, (b) the effects of foreign operations, (c) the tax effects of prior intercompany sales of inventory that are recognized at tax rates higher than current statutory tax rates and (d) the impact of intercompany profit elimination on the foreign derived intangible income deduction.

The effective tax rate of 23.4% for the nine months ended January 31, 2022, is higher than the expected tax rate of 22.7% on ordinary income for the full fiscal year, primarily due to the true-up of prior-year deferred tax liabilities and the impact of tax rate changes enacted in certain foreign jurisdictions, partially offset by the excess tax benefits related to stock-based compensation. The 23.4% effective tax rate for the nine months ended January 31, 2022, is higher than the effective tax rate of 16.2% for the same period last year, primarily due to (a) the absence of a deferred tax benefit recognized in the prior-year period related to an intercompany transfer of assets, (b) the impact of prior intercompany sales taxed at rates higher than current statutory tax rates, (c) the impact of the intercompany profit eliminations on the foreign derived intangible income deduction, and (d) increased true-ups of prior-year tax liabilities.

We continue to assert that the undistributed earnings of most of our foreign subsidiaries are reinvested indefinitely outside the United States. Therefore, no income taxes have been provided for any outside basis differences inherent in these subsidiaries other than those that were subject to the one-time repatriation tax. We previously changed our indefinite reinvestment assertion with respect to current year earnings and prior-year undistributed earnings for select foreign subsidiaries (but not for their outside basis differences). We have accrued applicable taxes for select entities which are not currently reinvested. No further changes have been made to our indefinite reinvestment assertion.

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.

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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 $1,218 million at April 30, 2021, and $860 million at January 31, 2022. The maximum term of outstanding derivative contracts was approximately 36 months at both April 30, 2021, and January 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 $680 million at April 30, 2021, and $676 million at January 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 the effectiveness on an ongoing basis. If determined to be no longer highly effective, designation and accounting for the instrument as a hedge would be discontinued.

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

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

		Three Months Ended
		January 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	(39)	$	23
Net gain (loss) reclassified from AOCI into earnings	Sales	4		2
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(6)	$	5
Net gain (loss) recognized in earnings	Other income (expense), net	4		(1)
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(33)	$	17
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,222	$	1,365
Other income (expense), net		9		4

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		Nine Months Ended
		January 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	(73)	$	53
Net gain (loss) reclassified from AOCI into earnings	Sales	21		1
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(11)	$	8
Net gain (loss) recognized in earnings	Other income (expense), net	15		(1)
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(66)	$	38
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	3,481	$	3,831
Other income (expense), net		13		(1)

We expect to reclassify $15 million of deferred net gains on cash flow hedges recorded in AOCI as of January 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, 2021				January 31, 2022
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	4	$	(2)	$	21	$	(3)
Currency derivatives	Other assets	—		—		13		(1)
Currency derivatives	Accrued expenses	4		(18)		—		(1)
Currency derivatives	Other liabilities	1		(18)		—		—
Not designated as hedges:
Currency derivatives	Other current assets	1		—		—		—
Currency derivatives	Other assets	—		—		—		—
Currency derivatives	Accrued expenses	—		—		—		(1)
Currency derivatives	Other liabilities	—		—		—		—

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

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

Credit risk. We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the contracts. To manage this risk, we contract only with major financial institutions that have 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

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payment or collateralization for derivative instruments in net liability positions. The aggregate fair value of all derivatives with creditworthiness requirements that were in a net liability position was $30 million at April 30, 2021, and $2 million at January 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 (i.e., those with a remaining term of 12 months or less) with the same counterparty on a net basis in our balance sheets. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. We do not net current derivatives with noncurrent derivatives in our balance sheets.

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

(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet		Net Amounts
April 30, 2021
Derivative assets	$	10	$	(7)	$	3	$	(1)	$	2
Derivative liabilities	(38)		7		(31)		1		(30)
January 31, 2022
Derivative assets	34		(4)		30		—		30
Derivative liabilities	(6)		4		(2)		—		(2)

No cash collateral was received or pledged related to our derivative contracts as of April 30, 2021, or January 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, 2021				January 31, 2022
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	1,150	$	1,150	$	812	$	812
Currency derivatives	3		3		30		30
Liabilities
Currency derivatives	31		31		2		2
Short-term borrowings	205		205		16		16
Long-term debt (including current portion)	2,354		2,663		2,311		2,537

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

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

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

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

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

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

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

We measure some assets and liabilities at fair value on a nonrecurring basis. That is, we do not measure them at fair value on an ongoing basis, but we do adjust them to fair value in some circumstances (for example, when we determine that an asset is impaired). During the nine months ended January 31, 2022, we recognized non-cash impairment charges of $9 million for certain fixed assets. The impairment charges, which were based on our measurements of the estimated fair values of those assets, are categorized as Level 2 within the valuation hierarchy. The remaining carrying amount of those assets is not significant. No other material nonrecurring fair value measurements were required during the periods presented in these financial statements.

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13.    Other Comprehensive Income

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

	Three Months Ended						Three Months Ended
	January 31, 2021						January 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	39	$	8	$	47	$	(23)	$	(4)	$	(27)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	39		8		47		(23)		(4)		(27)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(39)		9		(30)		23		(5)		18
Reclassification to earnings1	(4)		1		(3)		(2)		—		(2)
Other comprehensive income (loss), net	(43)		10		(33)		21		(5)		16
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	6		(1)		5		6		(1)		5
Other comprehensive income (loss), net	6		(1)		5		6		(1)		5
Total other comprehensive income (loss), net	$	2	$	17	$	19	$	4	$	(10)	$	(6)
	Nine Months Ended						Nine Months Ended
	January 31, 2021						January 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	97	$	16	$	113	$	(40)	$	(9)	$	(49)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	97		16		113		(40)		(9)		(49)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(73)		17		(56)		53		(12)		41
Reclassification to earnings1	(21)		5		(16)		(1)		—		(1)
Other comprehensive income (loss), net	(94)		22		(72)		52		(12)		40
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		(1)		—		(1)
Reclassification to earnings2	23		(6)		17		19		(5)		14
Other comprehensive income (loss), net	23		(6)		17		18		(5)		13
Total other comprehensive income (loss), net	$	26	$	32	$	58	$	30	$	(26)	$	4

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

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

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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, 2021 (2021 Form 10-K). Note that the results of operations for the nine months ended January 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, which resulted in a pre-tax gain of $127 million, and entered into a related transition services agreement (TSA) for these brands. Also, during fiscal 2021, we acquired Part Time Rangers Limited, which owns Part Time Rangers RTDs.

This adjustment removes (a) transaction and integration costs related to the acquisitions and divestitures, (b) the gain on the sale of Early Times, Canadian Mist, and Collingwood brands and related assets, (c) operating activity for the non-comparable period for Early Times, Canadian Mist, and Collingwood, which is activity in the first quarter of fiscal 2021, (d) the net sales and operating expenses recognized pursuant to the TSA related to (i) contract bottling services and (ii) distribution services in certain markets, and (e) operating activity for Part Time Rangers Holdings Limited for the non-comparable period, which is primarily activity in the first two quarters of fiscal 2022. We believe that these adjustments allow 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 three quarters of fiscal 2022, we recognized non-cash impairment charges of $9 million for certain fixed assets. We believe that this adjustment allows for us to better understand our organic results on a comparable basis. See Note 12 to the Condensed Consolidated Financial Statements for more information.

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

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

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the statements of operations to their nearest GAAP measures in the tables under “Results of Operations - Fiscal 2022 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 will no longer report “underlying changes” in certain measures of the statements of operations; instead, we will now report “organic change” in 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 is in response to comments from and discussions with the Staff of the Securities and Exchange Commission.

Although we will 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 will 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 2022 Year-to-Date Highlights,” we provide supplemental information for our largest markets ranked by percentage of total fiscal 2021 net sales. In addition to markets that are listed by country name, we include the following aggregations:

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

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

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

Brand Aggregations.

In “Results of Operations - Fiscal 2022 Year-to-Date Highlights,” we provide supplemental information for our largest brands ranked by percentage of total fiscal 2021 net sales. In addition to brands that are listed by name, we include the following aggregations:

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

•“American whiskey” includes the Jack Daniel’s family of brands, premium bourbons (defined below), and super-premium American whiskey (defined below).

•“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 No. 27 Gold Tennessee Whiskey, Jack Daniel’s Sinatra Select, and Jack Daniel’s Bottled-in-Bond.

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

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

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

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

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

•“Vodka” includes Finlandia.

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

Other Metrics.

•“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

•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

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•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 disruptions

•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 impact 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 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 nine months ended January 31, 2022, we experienced strong, broad-based reported net sales growth across all of our geographic clusters and Travel Retail channel due to the gradual re-opening of the on-premise channel, some degree of travel and tourism returning, and growing premiumization trends. While the financial impact of COVID-19 on our business is difficult to measure, we believe the timing and pace of global vaccination rates, governmental actions to lower or eliminate restrictions in certain economies around the world, and the post-pandemic economic recovery positively impacted our results when compared to the same period last year. We further discuss the effect of COVID-19 on our results where relevant below.

For the nine months ended January 31, 2022, our results were negatively impacted by supply chain disruptions, largely related to glass supply. These disruptions impacted our finished goods inventories, along with the inventories of our distributors and retailers, and negatively affected our reported net sales and input costs. We further discuss the effect of supply chain disruptions on our results where relevant below.

As of the third quarter ended January 31, 2022, we changed certain non-GAAP financial measures that we have historically used. We will no longer report “underlying changes” in certain measures of the statements of operations; instead, we will now report “organic change” in certain measures of the statements of operations. As more fully described in “Non-GAAP Financial Measures” above, “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.” This change to our non-GAAP financial measures is in response to comments from and discussions with the Staff of the Securities and Exchange Commission.

Fiscal 2022 Year-to-Date Highlights

•We delivered reported net sales of $2.9 billion, for the nine months ended January 31, 2022, an increase of 11% compared to the same period last year. The increase was driven by favorable price/mix and higher volumes, partially offset by the negative effect of foreign exchange and the effect of acquisitions and divestitures. An estimated net increase in distributor inventories positively impacted reported net sales.

◦From a brand perspective, reported net sales growth was driven by JDTW, our tequilas, premium bourbons, and JDTA.

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

Supply chain disruptions continued to have an adverse effect on our results.

•Reported advertising expense increased 12% for the nine months ended January 31, 2022, as we continued to invest behind our brands while cycling last year’s COVID-19 related phasing of spend towards the second half of the year.

•Reported SG&A expense increased 8% for the nine months ended January 31, 2022, driven primarily by (a) higher compensation related expenses, (b) comparison to lower discretionary spend due to COVID-19 during the same period last year, and (c) accruals for non-income-based tax contingencies.

•We delivered reported operating income of $958 million, for the nine months ended January 31, 2022, a decrease of 4% compared to the same period last year. We delivered diluted earnings per share of $1.43, for the nine months ended January 31, 2022, a decrease of 12% from the $1.63 reported for the same period last year, which included an estimated $0.19 per share benefit from the gain on the sale of the Early Times, Canadian Mist, and Collingwood brands and related assets.

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Summary of Operating Performance
	Three Months Ended January 31,										Nine Months Ended January 31,
(Dollars in millions)	2021			2022			Reported Change		Organic Change1		2021			2022			Reported Change		Organic Change1
Net sales	$	911		$	1,037		14	%	22	%	$	2,649		$	2,937		11	%	14	%
Cost of sales	361			415			15	%	23	%	1,053			1,172			11	%	16	%
Gross profit	550			622			13	%	22	%	1,596			1,765			11	%	14	%
Advertising	121			117			(4	%)	(2	%)	278			311			12	%	12	%
SG&A	157			162			4	%	6	%	460			495			8	%	8	%
Gain on sale of business											(127)			—			nm		n/a
Other expense (income), net	(9)			(4)			nm		nm		(13)			1			nm		nm
Operating income	281			347			24	%	43	%	998			958			(4	%)	19	%
Total operating expenses2	$	269		$	275		2	%	2	%	$	725		$	807		11	%	8	%
As a percentage of net sales3
Gross profit	60.4		%	60.0		%	(0.4)	pp			60.3		%	60.1		%	(0.2)	pp
Operating income	30.9		%	33.5		%	2.6	pp			37.7		%	32.6		%	(5.1)	pp
Non-operating postretirement expense	$	1		$	—		(60	%)			$	4		$	2		(47	%)
Interest expense, net	$	21		$	19		(6	%)			$	60		$	58		(3	%)
Effective tax rate	15.7		%	21.0		%	5.3	pp			16.2		%	23.4		%	7.2	pp
Diluted earnings per share	$	0.45		$	0.54		19	%			$	1.63		$	1.43		(12	%)
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).

Fiscal 2022 Outlook

Below we discuss our outlook for fiscal 2022, reflecting the trends, developments, and uncertainties we expect to affect our business. The fiscal 2022 outlook included in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our second quarter 2022 Form 10-Q was presented on an “underlying” basis. The current outlook is presented on an “organic” basis and is not directly comparable to previous “underlying” guidance due to the exclusion of the impact of estimated net changes in distributor inventories in our “underlying” guidance.

The revised fiscal 2022 outlook is as follows:

•Organic net sales outlook of 11% to 13% growth

•Reported gross margin is expected to be flat or slightly down compared to fiscal 2021

•Organic operating expenses are expected to grow 7% to 9%

•Organic operating income outlook of 12% to 16% growth

•Effective tax rate outlook continues to be in the range of approximately 22% to 23%

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.

Additional considerations related to our fiscal 2022 outlook:

Estimated net change in distributor inventories. For the nine months ended January 31, 2022, an estimated net increase in distributor inventories positively impacted organic net sales and organic operating income results. In the outlook provided above we assumed this year-to-date positive impact persists for the remainder of fiscal 2022. If this trend does not persist, we would expect actual results to differ. See “Important Information on Forward-Looking Statements” for details about the risks,

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uncertainties, and other factors that could cause actual results to differ materially from our historical experience or from our current expectations or projections.

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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 nine months ended January 31, 2022, compared to the same period last year.

Top Markets1
Nine months ended January 31, 2022	Net Sales % Change vs. 2021
Geographic area2	Reported		Acquisitions and Divestitures		Foreign Exchange		Organic3
United States	5	%	3	%	—	%	8	%
Developed International	12	%	—	%	3	%	15	%
Australia	4	%	—	%	1	%	5	%
Germany	16	%	—	%	2	%	18	%
United Kingdom	5	%	—	%	7	%	12	%
France	5	%	—	%	2	%	7	%
Canada	(10	%)	1	%	(4	%)	(13	%)
Rest of Developed International	33	%	3	%	2	%	39	%
Emerging	22	%	—	%	5	%	27	%
Mexico	13	%	—	%	(5	%)	9	%
Poland	7	%	—	%	3	%	10	%
Brazil	14	%	—	%	2	%	16	%
Russia	26	%	1	%	6	%	32	%
Rest of Emerging	37	%	—	%	15	%	52	%
Travel Retail	57	%	2	%	(1	%)	58	%
Non-branded and bulk	11	%	7	%	1	%	18	%
Total	11	%	2	%	2	%	14	%
Note: Results may differ due to rounding

1“Top Markets” are ranked based on percentage of total fiscal 2021 reported net sales. See 2021 Form 10-K “Results of Operations - Fiscal 2021 Market Highlights” and Note 8 to the Condensed Consolidated Financial Statements.

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

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

Reported net sales for some of the markets discussed below was positively impacted by comparisons against COVID-19 related declines during the same period last year. See “Overview” above for more information.

United States

•Reported net sales increased 5% compared to the same period last year.

Reported net sales gains were led by (a) JDTW, fueled by higher volumes and a favorable channel mix shift to the on- premise channel; (b) Herradura; (c) Woodford Reserve; and (d) Sonoma-Cutrer. An estimated net increase in distributor inventories positively impacted reported net sales. This growth was partially offset by the effect of acquisitions and divestitures along with lower volumes of JDTH and Gentleman Jack. Supply chain disruptions had an adverse effect on results.

Developed International

•Australia’s reported net sales increased 4% driven primarily by JD RTDs.

•Germany’s reported net sales increased 16% fueled by volumetric gains of JDTW and JD RTDs.

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•United Kingdom’s reported net sales increased 5% as growth across much of our portfolio, led by JDTW, was only partially offset by the negative effect of foreign exchange. Supply chain disruptions had an adverse effect on results.

•France’s reported net sales increased 5% driven by higher volumes of JDTW and JDTH, partially offset by the negative effect of foreign exchange. Supply chain disruptions had an adverse effect on results.

•Reported net sales in the Rest of Developed International increased 33% driven by (a) JDTW growth led by Spain, Korea, and Japan; and (b) JDTH growth led by Korea. An estimated net increase in distributor inventories positively impacted reported net sales.

Emerging

•Mexico’s reported net sales increased 13% driven primarily by the growth of Herradura along with the positive effect of foreign exchange. Supply chain disruptions had an adverse effect on results.

•Poland’s reported net sales increased 7% as growth across much of our portfolio, led by Finlandia and JDTW, was only partially offset by the negative effect of foreign exchange. Supply chain disruptions had an adverse effect on results.

•Brazil’s reported net sales increased 14% fueled by the launch of JDTA and higher volumes of JDTH, partially offset by lower volumes of JDTW. Supply chain disruptions had an adverse effect on results.

•Russia’s reported net sales increased 26% driven by the growth of JDTW, Finlandia, and the launch of JDTA.

•Reported net sales in the Rest of Emerging increased 37% driven primarily by JDTW gains, led by Turkey, Chile, and Romania. This growth was partially offset by the negative effect of foreign exchange. An estimated net increase in distributor inventories positively impacted reported net sales.

Travel Retail’s reported net sales increased 57% driven primarily by higher volumes across much of our portfolio as we cycled against significant declines during the same period last year, partially offset by unfavorable price/mix.

Non-branded and bulk reported net sales increased 11% driven by higher volumes for used barrels.

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Brand Highlights

The following table provides supplemental information for our largest brands. We discuss results of the brands most affecting our performance below the table. Unless otherwise indicated, all related commentary is for the nine months ended January 31, 2022, compared to the same period last year.

Major Brands
Nine months ended January 31, 2022	Net Sales % Change vs 2021
Product category / brand family / brand1	Reported		Acquisitions and Divestitures		Foreign Exchange		Organic2
Whiskey	10	%	2	%	2	%	14	%
Jack Daniel’s family of brands	12	%	—	%	2	%	14	%
JDTW	17	%	—	%	3	%	20	%
JD RTD/RTP	6	%	—	%	—	%	6	%
JDTH	(1	%)	—	%	2	%	1	%
Gentleman Jack	(9	%)	—	%	2	%	(7	%)
JDTF	9	%	—	%	1	%	11	%
JDTA	41	%	—	%	4	%	45	%
Other Jack Daniel’s whiskey brands	5	%	—	%	1	%	7	%
Woodford Reserve	9	%	—	%	—	%	9	%
Tequila	19	%	—	%	(2	%)	17	%
Herradura	31	%	—	%	(2	%)	29	%
el Jimador	21	%	—	%	(1	%)	20	%
Wine	8	%	—	%	—	%	8	%
Vodka (Finlandia)	21	%	—	%	2	%	23	%
Rest of Portfolio	9	%	(3	%)	18	%	23	%
Non-branded and bulk	11	%	7	%	1	%	18	%
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.

Reported net sales for some of the brands discussed below was positively impacted by comparisons against COVID-19 related declines during the same period last year. See “Overview” above for more information.

Whiskey

•The Jack Daniel’s family of brands grew reported net sales 12% fueled primarily by the broad-based growth of JDTW.

•Reported net sales for JDTW increased 17% compared to the same period last year. Gains were led by (a) broad-based volume growth in the United States, developed international markets, and emerging markets; and (b) a favorable channel mix shift to the on-premise channel. An estimated net increase in distributor inventories positively impacted reported net sales. This growth was partially offset by the negative effect of foreign exchange. Supply chain disruptions had an adverse effect on results.

•The JD RTD/RTP brand’s reported net sales grew 6% driven primarily by higher volumes in Germany. An estimated net decrease in distributor inventories negatively impacted reported net sales.

•Reported net sales for JDTH decreased 1% driven by declines in the United States and the negative effect of foreign exchange. These declines were partially offset by broad-based gains in our international markets. Supply chain disruptions had an adverse effect on results.

•Reported net sales for Gentleman Jack decreased 9% driven primarily by lower volumes in the United States. Supply chain disruptions had an adverse effect on results.

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•JDTF grew reported net sales 9% driven primarily by broad-based growth led by emerging markets. An estimated net increase in distributor inventories positively impacted reported net sales. Supply chain disruptions had an adverse effect on results.

•JDTA grew reported net sales 41% fueled by the continued international launch in our emerging markets, led by Brazil and Chile, along with volumetric gains in the United States.

•Woodford Reserve’s reported net sales increased 9% driven primarily by growth in the United States, Travel Retail, and the United Kingdom. An estimated net decrease in distributor inventories negatively impacted reported net sales as supply chain disruptions had an adverse effect on results.

Tequila

•Herradura’s reported net sales increased 31% driven by higher volumes in the United States and Mexico.

•el Jimador’s reported net sales increased 21% due to broad-based volume growth led by the United States, Colombia, and the United Kingdom.

Wine reported net sales increased 8% driven primarily by higher volumes of Sonoma-Cutrer.

Vodka (Finlandia) reported net sales increased 21% driven by broad-based growth led by emerging markets.

Rest of Portfolio reported net sales increased 9% driven by higher volumes of Chambord, partially offset by the negative effect of foreign exchange.

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

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Year-Over-Year Period Comparisons

Reported net sales for certain markets and brands was positively impacted by comparisons against COVID-19 related declines during the same period last year. See “Overview” above for more information.

Net Sales
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported net sales	14	%	11	%
Acquisitions and divestitures	2	%	2	%
Foreign exchange	6	%	2	%
Change in organic net sales	22	%	14	%
Note: Results may differ due to rounding

For the three months ended January 31, 2022, reported net sales were $1.0 billion, an increase of $126 million, or 14%, compared to the same period last year. The increase was driven primarily by higher volumes, partially offset by the negative effect of foreign exchange and the effect of acquisitions and divestitures. An estimated net increase in distributor inventories positively impacted reported net sales. Volume growth was led by JDTW, New Mix, and JD RTDs. Supply chain disruptions had an adverse effect in the quarter.

For the nine months ended January 31, 2022, reported net sales were $2.9 billion, an increase of $288 million, or 11%, compared to the same period last year. The increase was driven by favorable price/mix and higher volumes, partially offset by the negative effect of foreign exchange and the effect of acquisitions and divestitures. An estimated net increase in distributor inventories positively impacted reported net sales. Favorable price/mix was driven by faster growth from our higher-priced brands, led by JDTW, and a favorable channel mix shift due to the continued re-opening of the on-premise channel. Volume growth was led by JDTW and JD RTDs, partially offset by lower volumes of New Mix. Supply chain disruptions had an adverse effect on year-to-date results. See “Results of Operations - Fiscal 2022 Year-to-Date Highlights” above for further details on net sales for the nine months ended January 31, 2022.

Cost of Sales
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported cost of sales	15	%	11	%
Acquisitions and divestitures	5	%	3	%
Foreign exchange	3	%	1	%
Change in organic cost of sales	23	%	16	%
Note: Results may differ due to rounding

For the three months ended January 31, 2022, reported cost of sales were $415 million, an increase of $54 million, or 15%, compared to the same period last year. The increase was driven by higher volumes and unfavorable cost/mix, partially offset by the effect of acquisitions and divestitures and the positive effect of foreign exchange. An estimated net increase in distributor inventories negatively impacted reported cost of sales. Volume growth was led by JDTW, New Mix, and JD RTDs. Unfavorable cost/mix reflects (a) a shift in portfolio mix toward our higher-cost brands, (b) higher costs related to supply chain disruptions, and (c) higher input costs related to grain and agave.

For the nine months ended January 31, 2022, reported cost of sales were $1.2 billion, an increase of $119 million, or 11%, compared to the same period last year. The increase was driven by unfavorable cost/mix and higher volumes partially offset by the effect of acquisitions and divestitures. Unfavorable cost/mix reflects (a) a shift in portfolio mix toward our higher-cost brands, (b) higher costs related to supply chain disruptions, and (c) higher input costs related to agave and grain. Volume growth was led by JDTW and JD RTDs, partially offset by lower volumes of New Mix.

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Gross Profit
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported gross profit	13	%	11	%
Acquisitions and divestitures	1	%	1	%
Foreign exchange	8	%	2	%
Change in organic gross profit	22	%	14	%
Note: Results may differ due to rounding

Gross Margin
For the period ended January 31	3 months		9 Months
Prior year gross margin	60.4	%	60.3	%
Price/mix	1.5	%	0.7	%
Cost/mix	(1.8)	%	(1.1)	%
Acquisitions and divestitures	0.8	%	0.5	%
Foreign exchange	(0.9	%)	(0.3	%)
Change in gross margin	(0.4	%)	(0.2	%)
Current year gross margin	60.0	%	60.1	%
Note: Results may differ due to rounding	—		—

For the three months ended January 31, 2022, reported gross profit of $622 million increased $72 million, or 13%, compared to the same period last year. Gross margin decreased 0.4 percentage points to 60.0% from 60.4% in the same period last year. The decrease in gross margin was driven by unfavorable cost/mix and the negative effect of foreign exchange, largely offset by favorable price/mix and the effect of acquisitions and divestitures.

For the nine months ended January 31, 2022, reported gross profit of $1.8 billion increased $169 million, or 11%, compared to the same period last year. Gross margin decreased 0.2 percentage points to 60.1% from 60.3% in the same period last year. The decrease in gross margin was driven by unfavorable cost/mix and the negative effect of foreign exchange, largely offset by favorable price/mix and the effect of acquisitions and divestitures.

Operating Expenses
Percentage change versus the prior year period ended January 31
3 Months	Reported		Impairment Charges		Foreign Exchange		Organic
Advertising	(4	%)	—	%	2	%	(2	%)
SG&A	4	%	—	%	2	%	6	%
Total operating expenses1	2	%	—	%	—	%	2	%
9 Months
Advertising	12	%	—	%	—	%	12	%
SG&A	8	%	—	%	—	%	8	%
Total operating expenses1	11	%	(1	%)	(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 January 31, 2022, reported operating expenses totaled $275 million, an increase of $6 million, or 2% compared to the same period last year.

•Reported advertising expense decreased 4% for the three months ended January 31, 2022 driven primarily by cycling last year’s phasing of spend from the first half to the second half of the fiscal year, partially offset by the positive effect of foreign exchange.

•Reported SG&A expense increased 4% for the three months ended January 31, 2022 driven primarily by higher compensation related expenses and discretionary spend, partially offset by the positive effect of foreign exchange.

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For the nine months ended January 31, 2022, reported operating expenses totaled $807 million, an increase of $82 million, or 11%, compared to the same period last year.

•Reported advertising expense increased 12% for the nine months ended January 31, 2022 as we continued to invest behind our brands while cycling last year’s COVID-19 related phasing of spend towards the second half of the year.

•Reported SG&A expense increased 8% for the nine months ended January 31, 2022 driven primarily by (a) higher compensation related expenses, (b) comparison to lower discretionary spend due to COVID-19 during the same period last year; and (c) accruals for non-income-based tax contingencies.

Operating Income
Percentage change versus the prior year period ended January 31	3 Months		9 Months
Change in reported operating income	24	%	(4	%)
Acquisitions and divestitures	2	%	16	%
Impairment charges	—	%	1	%
Foreign exchange	18	%	6	%
Change in organic operating income	43	%	19	%
Note: Results may differ due to rounding

For the three months ended January 31, 2022, reported operating income totaled $347 million, an increase of $66 million, or 24%, compared to the same period last year. Operating margin increased 2.6 percentage points to 33.5%, from 30.9% in the same period last year driven by operating expense leverage, partially offset by the negative effect of foreign exchange.

For the nine months ended January 31, 2022, reported operating income totaled $958 million, a decrease of $40 million, or 4%, compared to the same period last year. Operating margin decreased 5.1 percentage points to 32.6% from 37.7% in the same period last year. The effect of acquisitions and divestitures (primarily the fiscal 2021 gain on sale of the Early Times, Canadian Mist, and Collingwood brands and related assets) contributed 4.7 percentage points to this decrease.

The effective tax rate for the three months ended January 31, 2022, was 21.0% compared to 15.7% for the same period last year. The increase in our effective tax rate was driven primarily by (a) the impact of prior intercompany sales of inventory taxed at rates higher than current statutory tax rates, (b) the impact of intercompany profit eliminations on the foreign derived income deduction, and (c) the impact of current year changes in tax laws in certain foreign and state jurisdictions.

The effective tax rate for the nine months ended January 31, 2022, was 23.4% compared to 16.2% for the same period last year. The increase in our effective rate was primarily due to (a) the absence of deferred tax benefit recognized in the prior-year related to an intercompany transfer of assets, (b) the impact of prior intercompany sales of inventory taxed at rates higher than current statutory tax rates, (c) the impact of intercompany profit eliminations on the foreign derived intangible income deduction, and (d) increased true-ups of prior-year tax liabilities.

Diluted earnings per share of $0.54 in the three months ended January 31, 2022, increased 19% from the $0.45 reported for the same period last year due to the increase in reported operating income, partially offset by higher income taxes. Diluted earnings per share of $1.43 for the nine months ended January 31, 2022, decreased 12% from the $1.63 reported for the same period last year, which includes an estimated $0.19 per share benefit from the gain on sale of Early Times, Canadian Mist, and Collingwood brands and related assets.

Liquidity and Financial Condition

Cash flows. Cash and cash equivalents decreased $338 million during the nine months ended January 31, 2022. Cash provided by operations was $683 million during the nine months ended January 31, 2022, compared to $572 million for the same period last year. The $111 million increase reflects improved operating results and the impact of changes in working capital, which included the collection in December 2021 of approximately $62 million of accounts receivable from Bacardi that had been withheld since fiscal 2021. (See Note 5 to the accompanying condensed consolidated financial statements for details about the Bacardi matter.)

The impact of investing activities on cash and cash equivalents was a decrease of $63 million for the nine months ended January 31, 2022, compared to an increase of $120 million for the same period last year. The $183 million change largely reflects the proceeds of $177 million received in the prior-year period from our divestiture of the Early Times, Canadian Mist, and Collingwood brands and related assets.

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Cash used for financing activities was $930 million during the nine months ended January 31, 2022, compared to $294 million for the same period last year. The $636 million increase largely reflects a special cash dividend payment of $479 million in December 2021 and $158 million increase in net repayments of short-term borrowings.

The impact on cash and cash equivalents as a result of exchange rate changes was a decrease of $28 million for the nine months ended January 31, 2022, compared to an increase of $33 million for the same period last year.

Liquidity. We generate strong cash flows from operations, which enable us to meet current obligations, fund capital expenditures, pay regular dividends, and return cash to our stockholders from time to time through share repurchases and special dividends. 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.

Cash and cash equivalents were $1,150 million at April 30, 2021, and $812 million at January 31, 2022. As of January 31, 2022, approximately 71% 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 regularly use to fund our short-term operational needs. Please see Note 6 to the Condensed Consolidated Financial Statements for outstanding commercial paper balances, interest rates, and days to maturity at April 30, 2021, and January 31, 2022. The average balances, interest rates, and original maturities during the periods ended January 31, 2021 and 2022, are presented below.

	Three Months Average		Nine Months Average
	January 31,		January 31,
(Dollars in millions)	2021	2022	2021	2022
Average commercial paper	$308	$—	$342	$78
Average interest rate	0.32%	—%	0.53%	0.16%
Average days to maturity at issuance	147	—	127	32

Our commercial paper program is supported by available commitments under our undrawn $800 million bank credit facility. The credit facility, which was extended for an additional year on November 10, 2021, is now scheduled to expire on November 10, 2024. Although unlikely, under extreme market conditions, one or more participating banks may not be able to fund its commitments under our credit facility. To manage this counterparty credit risk, we partner with banks that have investment grade credit ratings, limit the amount of exposure we have with each bank, and monitor the financial conditions of each bank.

While we expect to meet our 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. Should we have additional liquidity needs, we believe that we could access long-term financing in the debt capital markets.

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

As announced on November 18, 2021, our Board of Directors increased the quarterly cash dividend on our Class A and Class B common stock from $0.1795 per share to $0.1885 per share. The quarterly cash dividend was paid on December 28, 2021, to stockholders of record on December 3, 2021.

The Board also declared a special cash dividend of $1.00 per share on our Class A and Class B common stock. The special cash dividend was paid on December 29, 2021, to stockholders of record on December 9, 2021.

Additionally, as announced on January 25, 2022, our Board of Directors declared a regular quarterly cash dividend on our Class A and Class B common stock of $0.1885 per share. The quarterly cash dividend is payable on April 1, 2022, to stockholders of record on March 8, 2022.

34

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, 2021, there have been no material changes to the market risks faced by us or to our risk management program.

Item 4. Controls and Procedures

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

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

35

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our 2021 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 2021 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 January 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).

36

SIGNATURES

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

		BROWN-FORMAN CORPORATION
		(Registrant)
Date:	March 3, 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)

37

EX-31.1

Exhibit 31.1

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

I, Lawson E. Whiting, certify that:

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

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

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

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

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

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

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

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

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

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

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

Dated:	March 3, 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:	March 3, 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 January 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:	March 3, 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.

XML

Document and Entity Information - shares	9 Months Ended
	Jan. 31, 2022	Feb. 28, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jan. 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
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--04-30
Common stock, Class A, voting [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A Common Stock (voting), $0.15 par value
Trading Symbol	BFA
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		169,175,352
Common stock, Class B, nonvoting [Member]
Document Information [Line Items]
Title of 12(b) Security	Class B Common Stock (nonvoting), $0.15 par value
Trading Symbol	BFB
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		309,795,475
1.20% notes, due July 7, 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	1.200% Notes due 2026
Trading Symbol	BF26
Security Exchange Name	NYSE
2.60% notes, due July 7, 2028 [Member]
Document Information [Line Items]
Title of 12(b) Security	2.600% Notes due 2028
Trading Symbol	BF28
Security Exchange Name	NYSE

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2022	Jan. 31, 2021	Jan. 31, 2022	Jan. 31, 2021
Income Statement [Abstract]
Sales	$ 1,365	$ 1,222	$ 3,831	$ 3,481
Excise taxes	328	311	894	832
Net sales	1,037	911	2,937	2,649
Cost of sales	415	361	1,172	1,053
Gross profit	622	550	1,765	1,596
Advertising expenses	117	121	311	278
Selling, general, and administrative expenses	162	157	495	460
Gain on sale of business	0	0	0	(127)
Other expense (income), net	(4)	(9)	1	(13)
Operating income	347	281	958	998
Non-operating postretirement expense	0	1	2	4
Interest income	(1)	0	(3)	(1)
Interest expense	20	21	61	61
Income before income taxes	328	259	898	934
Income taxes	69	40	211	151
Net income	$ 259	$ 219	$ 687	$ 783
Earnings per share:
Basic (dollars per share)	$ 0.54	$ 0.46	$ 1.43	$ 1.64
Diluted (dollars per share)	$ 0.54	$ 0.45	$ 1.43	$ 1.63

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2022	Jan. 31, 2021	Jan. 31, 2022	Jan. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 259	$ 219	$ 687	$ 783
Other comprehensive income (loss), net of tax:
Currency translation adjustments	(27)	47	(49)	113
Cash flow hedge adjustments	16	(33)	40	(72)
Postretirement benefits adjustments	5	5	13	17
Net other comprehensive income (loss)	(6)	19	4	58
Comprehensive income	$ 253	$ 238	$ 691	$ 841

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Jan. 31, 2022	Apr. 30, 2021
Assets
Cash and cash equivalents	$ 812	$ 1,150
Accounts receivable, less allowance for doubtful accounts of $7 at April 30 and $6 at January 31	796	753
Inventories:
Barreled whiskey	1,126	1,101
Finished goods	302	323
Work in process	220	199
Raw materials and supplies	121	128
Total inventories	1,769	1,751
Other current assets	276	263
Total current assets	3,653	3,917
Property, plant, and equipment, net	818	832
Goodwill	771	779
Other intangible assets	652	676
Deferred tax assets	67	70
Other assets	265	248
Total assets	6,226	6,522
Liabilities
Accounts payable and accrued expenses	629	679
Dividends payable	90	0
Accrued income taxes	64	34
Short-term borrowings	16	205
Current portion of long-term debt	250	0
Total current liabilities	1,049	918
Long-term debt	2,061	2,354
Deferred tax liabilities	190	169
Accrued pension and other postretirement benefits	216	219
Other liabilities	191	206
Total liabilities	3,707	3,866
Commitments and contingencies
Stockholders' Equity
Additional paid-in capital	3	0
Retained earnings	3,091	3,243
Accumulated other comprehensive income (loss), net of tax	(418)	(422)
Treasury stock, at cost (5,803,000 and 5,613,000 shares at April 30 and January 31, respectively)	(229)	(237)
Total stockholders' equity	2,519	2,656
Total liabilities and stockholders' equity	6,226	6,522
Common stock, Class A, voting [Member]
Stockholders' Equity
Common stock	25	25
Common stock, Class B, nonvoting [Member]
Stockholders' Equity
Common stock	$ 47	$ 47

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jan. 31, 2022	Apr. 30, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 6	$ 7
Treasury stock, shares	5,613,000	5,803,000
Class of Stock [Line Items]
Current portion of long-term debt, Carrying Amount	$ 250	$ 0
Common Class A [Member]
Class of Stock [Line Items]
Common stock, par value	$ 0.15	$ 0.15
Common stock, shares authorized	170,000,000	170,000,000
Common stock, shares issued	170,000,000	170,000,000
Nonvoting Common Stock [Member]
Class of Stock [Line Items]
Common stock, par value	$ 0.15	$ 0.15
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	314,532,000	314,532,000

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Jan. 31, 2022	Jan. 31, 2021
Cash flows from operating activities:
Net income	$ 687	$ 783
Adjustments to reconcile net income to net cash provided by operations:
Gain on sale of business	0	(127)
Non-cash asset write-downs	9	0
Depreciation and amortization	60	58
Stock-based compensation expense	11	9
Deferred income tax provision (benefit)	(3)	(56)
Other, net	15	(15)
Changes in assets and liabilities, excluding the effects of sale of business:
Accounts receivable	(59)	(219)
Inventories	(33)	(14)
Other current assets	0	30
Accounts payable and accrued expenses	(32)	68
Accrued income taxes	30	16
Other operating assets and liabilities	(2)	39
Cash provided by operating activities	683	572
Cash flows from investing activities:
Proceeds from sale of business	0	177
Proceeds from sale of property, plant, and equipment	2	0
Acquisition of business, net of cash acquired	0	(14)
Additions to property, plant, and equipment	(62)	(41)
Computer software expenditures	(3)	(2)
Cash provided by (used for) investing activities	(63)	120
Cash flows from financing activities:
Proceeds from short-term borrowings, maturities greater than 90 days	0	344
Repayments of short-term borrowings, maturities greater than 90 days	0	(342)
Net change in short-term borrowings, maturities of 90 days or less	(181)	(25)
Payments of withholding taxes related to stock-based awards	(8)	(18)
Dividends paid	(741)	(253)
Cash used for financing activities	(930)	(294)
Effect of exchange rate changes on cash and cash equivalents	(28)	33
Net increase (decrease) in cash and cash equivalents	(338)	431
Cash and cash equivalents, beginning of period	1,150	675
Cash and cash equivalents, end of period	$ 812	$ 1,106

XML

Condensed Consolidated Financial Statements

9 Months Ended

Jan. 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, 2021 (2021 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our 2021 Form 10-K.

XML

Earnings Per Share

9 Months Ended

Jan. 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				Nine Months Ended
	January 31,				January 31,
(Dollars in millions, except per share amounts)	2021		2022		2021		2022
Net income available to common stockholders	$	219	$	259	$	783	$	687
Share data (in thousands):
Basic average common shares outstanding	478,599		478,887		478,471		478,844
Dilutive effect of stock-based awards	2,237		1,680		2,194		1,755
Diluted average common shares outstanding	480,836		480,567		480,665		480,599
Basic earnings per share	$	0.46	$	0.54	$	1.64	$	1.43
Diluted earnings per share	$	0.45	$	0.54	$	1.63	$	1.43

We excluded common stock-based awards for approximately 298,000 shares and 789,000 shares from the calculation of diluted earnings per share for the three months ended January 31, 2021 and 2022, respectively. We excluded common stock-based awards for approximately 211,000 shares and 623,000 shares from the calculation of diluted earnings per share for the nine months ended January 31, 2021 and 2022, respectively. We excluded those awards because they were not dilutive for those periods under the treasury stock method.

XML

Inventories	9 Months Ended
	Jan. 31, 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 $353 million higher than reported as of April 30, 2021, and $388 million higher than reported as of January 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.

XML

Goodwill and Other Intangible Assets

9 Months Ended

Jan. 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 nine months ended January 31, 2022:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2021	$	779	$	676
Foreign currency translation adjustment	(8)		(24)
Balance at January 31, 2022	$	771	$	652

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

XML

Commitments and Contingencies

9 Months Ended

Jan. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

We operate in a litigious environment, and we are sued in the normal course of business. Sometimes plaintiffs seek substantial damages. Significant judgment is required in predicting the outcome of these suits and claims, many of which take years to adjudicate. We accrue estimated costs for a contingency when we believe that a loss is probable and we can make a reasonable estimate of the loss, and then adjust the accrual as appropriate to reflect changes in facts and circumstances. We do not believe it is reasonably possible that these existing loss contingencies, individually or in the aggregate, would have a material adverse effect on our financial position, results of operations, or liquidity. No material accrued loss contingencies were recorded as of January 31, 2022.

We have guaranteed the repayment by a third-party importer of its obligation under a bank credit facility that it uses in connection with its importation of our products in Russia. If the importer were to default on that obligation, which we believe is unlikely, our maximum possible exposure under the existing terms of the guaranty would be approximately $11 million (subject to changes in foreign currency exchange rates). Both the fair value and carrying amount of the guaranty are insignificant. As of January 31, 2022, our actual exposure under the guaranty of the importer’s obligation was approximately $4 million. We also have accounts receivable from that importer of approximately $9 million at January 31, 2022, which we expect to collect in full. Based on the financial support we provide to the importer, we believe it meets the definition of a variable interest entity. However, because we do not control this entity, it is not included in our consolidated financial statements.

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

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

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

Since it was raised, we have disputed Bacardi’s claim of commercial agency compensation and issued a demand that Bacardi adhere to the dispute resolution process mandated by the Agreement. The ruling for the Commercial Court Action was issued on May 19, 2021, in which the Court declined to order Bacardi to return the amounts withheld pending the outcome of the Arbitration. The Arbitration took place the week of July 12, 2021, and the decision was rendered December 8, 2021. The decision confirmed that Bacardi was not entitled to compensation as a commercial agent but was awarded an immaterial amount for its work in winding up the business. In December 2021, Bacardi remitted £47 million related to this matter.

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Debt

9 Months Ended

Jan. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt

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

(Principal and carrying amounts in millions)	April 30, 2021		January 31, 2022
2.250% senior notes, $250 principal amount, due January 15, 2023	$	249	$	250
3.500% senior notes, $300 principal amount, due April 15, 2025	298		298
1.200% senior notes, €300 principal amount, due July 7, 2026	362		333
2.600% senior notes, £300 principal amount, due July 7, 2028	415		399
4.000% senior notes, $300 principal amount, due April 15, 2038	294		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	488		488
	2,354		2,311
Less current portion	—		250
	$	2,354	$	2,061

Our short-term borrowings of $205 million as of April 30, 2021 included of $195 million of borrowings under our commercial paper program. There were no borrowings under that program as of January 31, 2022.

(Dollars in millions)	April 30, 2021	January 31, 2022
Commercial paper	$195	$—
Average interest rate	0.16%	—%
Average remaining days to maturity	24	0

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Stockholders' Equity

9 Months Ended

Jan. 31, 2022

Stockholders' Equity Attributable to Parent [Abstract]

Stockholders' Equity

Stockholders’ Equity

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

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

The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 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, 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
Net income							236						236
Net other comprehensive income (loss)									2				2
Stock-based compensation expense					3								3
Stock issued under compensation plans											1		1
Loss on issuance of treasury stock issued under compensation plans					(2)								(2)
Balance at October 31, 2021	25		47		3		3,491		(412)		(231)		2,923
Net income							259						259
Net other comprehensive income (loss)									(6)				(6)
Declaration of cash dividends							(659)						(659)
Stock-based compensation expense					4								4
Stock issued under compensation plans											2		2
Loss on issuance of treasury stock issued under compensation plans					(4)								(4)
Balance at January 31, 2022	$	25	$	47	$	3	$	3,091	$	(418)	$	(229)	$	2,519

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

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2021	$	(179)	$	(16)	$	(227)	$	(422)
Net other comprehensive income (loss)	(49)		40		13		4
Balance at January 31, 2022	$	(228)	$	24	$	(214)	$	(418)

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

Declaration Date	Record Date	Payable Date	Amount per Share
May 27, 2021	June 8, 2021	July 1, 2021	$0.1795
July 22, 2021	September 3, 2021	October 1, 2021	$0.1795
November 18, 2021	December 3, 2021	December 28, 2021	$0.1885
November 18, 2021	December 9, 2021	December 29, 2021	$1.0000
January 25, 2022	March 8, 2022	April 1, 2022	$0.1885

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Net Sales

9 Months Ended

Jan. 31, 2022

Net Sales [Abstract]

Net Sales

Net Sales 

The following table shows our net sales by geography:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
United States	$	425	$	488	$	1,334	$	1,400
Developed International1	292		318		789		884
Emerging2	171		196		438		533
Travel Retail3	12		25		47		74
Non-branded & bulk4	11		10		41		46
Total	$	911	$	1,037	$	2,649	$	2,937

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 Australia, Germany, 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 Russia.

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

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

The following table shows our net sales by product category:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
Whiskey1	$	731	$	835	$	2,101	$	2,309
Tequila2	72		90		224		266
Wine3	50		54		162		176
Vodka4	26		29		71		86
Non-branded and bulk5	11		10		41		46
Rest of portfolio	21		19		50		54
Total	$	911	$	1,037	$	2,649	$	2,937

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

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

3Includes Korbel Champagne and Sonoma-Cutrer wines.

4Includes Finlandia.

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

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Pension and Other Postretirement Benefits

9 Months Ended

Jan. 31, 2022

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

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

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
Pension Benefits:
Service cost	$	7	$	7	$	20	$	20
Interest cost	6		5		19		16
Expected return on plan assets	(12)		(11)		(35)		(34)
Amortization of:
Prior service cost (credit)	—		—		1		1
Net actuarial loss	7		6		20		18
Settlement charge	—		—		—		1
Net cost	$	8	$	7	$	25	$	22
Other Postretirement Benefits:
Service cost	$	—	$	—	$	1	$	1
Interest cost	1		—		1		1
Amortization of prior service cost (credit)	(1)		—		(2)		(1)
Net cost	$	—	$	—	$	—	$	1

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Income Taxes

9 Months Ended

Jan. 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 22.7%, which is greater than the U.S. federal statutory rate of 21.0%, due to (a) state income taxes, (b) the effects of foreign operations, (c) the tax effects of prior intercompany sales of inventory that are recognized at tax rates higher than current statutory tax rates and (d) the impact of intercompany profit elimination on the foreign derived intangible income deduction.

The effective tax rate of 23.4% for the nine months ended January 31, 2022, is higher than the expected tax rate of 22.7% on ordinary income for the full fiscal year, primarily due to the true-up of prior-year deferred tax liabilities and the impact of tax rate changes enacted in certain foreign jurisdictions, partially offset by the excess tax benefits related to stock-based compensation. The 23.4% effective tax rate for the nine months ended January 31, 2022, is higher than the effective tax rate of 16.2% for the same period last year, primarily due to (a) the absence of a deferred tax benefit recognized in the prior-year period related to an intercompany transfer of assets, (b) the impact of prior intercompany sales taxed at rates higher than current statutory tax rates, (c) the impact of the intercompany profit eliminations on the foreign derived intangible income deduction, and (d) increased true-ups of prior-year tax liabilities.

We continue to assert that the undistributed earnings of most of our foreign subsidiaries are reinvested indefinitely outside the United States. Therefore, no income taxes have been provided for any outside basis differences inherent in these subsidiaries other than those that were subject to the one-time repatriation tax. We previously changed our indefinite reinvestment assertion with respect to current year earnings and prior-year undistributed earnings for select foreign subsidiaries (but not for their outside basis differences). We have accrued applicable taxes for select entities which are not currently reinvested. No further changes have been made to our indefinite reinvestment assertion.

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Derivative Financial Instruments and Hedging Activities

9 Months Ended

Jan. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

Derivative Financial Instruments and Hedging ActivitiesWe 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 $1,218 million at April 30, 2021, and $860 million at January 31, 2022. The maximum term of outstanding derivative contracts was approximately 36 months at both April 30, 2021, and January 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 $680 million at April 30, 2021, and $676 million at January 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 the effectiveness on an ongoing basis. If determined to be no longer highly effective, designation and accounting for the instrument as a hedge would be discontinued.

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

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

		Three Months Ended
		January 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	(39)	$	23
Net gain (loss) reclassified from AOCI into earnings	Sales	4		2
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(6)	$	5
Net gain (loss) recognized in earnings	Other income (expense), net	4		(1)
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(33)	$	17
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,222	$	1,365
Other income (expense), net		9		4

		Nine Months Ended
		January 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	(73)	$	53
Net gain (loss) reclassified from AOCI into earnings	Sales	21		1
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(11)	$	8
Net gain (loss) recognized in earnings	Other income (expense), net	15		(1)
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(66)	$	38
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	3,481	$	3,831
Other income (expense), net		13		(1)

We expect to reclassify $15 million of deferred net gains on cash flow hedges recorded in AOCI as of January 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, 2021				January 31, 2022
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	4	$	(2)	$	21	$	(3)
Currency derivatives	Other assets	—		—		13		(1)
Currency derivatives	Accrued expenses	4		(18)		—		(1)
Currency derivatives	Other liabilities	1		(18)		—		—
Not designated as hedges:
Currency derivatives	Other current assets	1		—		—		—
Currency derivatives	Other assets	—		—		—		—
Currency derivatives	Accrued expenses	—		—		—		(1)
Currency derivatives	Other liabilities	—		—		—		—

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

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

Credit risk. We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the contracts. To manage this risk, we contract only with major financial institutions that have 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. The aggregate fair value of all derivatives with creditworthiness requirements that were in a net liability position was $30 million at April 30, 2021, and $2 million at January 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 (i.e., those with a remaining term of 12 months or less) with the same counterparty on a net basis in our balance sheets. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. We do not net current derivatives with noncurrent derivatives in our balance sheets.

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

(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet		Net Amounts
April 30, 2021
Derivative assets	$	10	$	(7)	$	3	$	(1)	$	2
Derivative liabilities	(38)		7		(31)		1		(30)
January 31, 2022
Derivative assets	34		(4)		30		—		30
Derivative liabilities	(6)		4		(2)		—		(2)

No cash collateral was received or pledged related to our derivative contracts as of April 30, 2021, or January 31, 2022.

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Fair Value Measurements

9 Months Ended

Jan. 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, 2021				January 31, 2022
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	1,150	$	1,150	$	812	$	812
Currency derivatives	3		3		30		30
Liabilities
Currency derivatives	31		31		2		2
Short-term borrowings	205		205		16		16
Long-term debt (including current portion)	2,354		2,663		2,311		2,537

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

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

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

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

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

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

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

We measure some assets and liabilities at fair value on a nonrecurring basis. That is, we do not measure them at fair value on an ongoing basis, but we do adjust them to fair value in some circumstances (for example, when we determine that an asset is impaired). During the nine months ended January 31, 2022, we recognized non-cash impairment charges of $9 million for certain fixed assets. The impairment charges, which were based on our measurements of the estimated fair values of those assets, are categorized as Level 2 within the valuation hierarchy. The remaining carrying amount of those assets is not significant. No other material nonrecurring fair value measurements were required during the periods presented in these financial statements.

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Other Comprehensive Income

9 Months Ended

Jan. 31, 2022

Statement of Comprehensive Income [Abstract]

Other Comprehensive Income

Other Comprehensive Income

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

	Three Months Ended						Three Months Ended
	January 31, 2021						January 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	39	$	8	$	47	$	(23)	$	(4)	$	(27)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	39		8		47		(23)		(4)		(27)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(39)		9		(30)		23		(5)		18
Reclassification to earnings1	(4)		1		(3)		(2)		—		(2)
Other comprehensive income (loss), net	(43)		10		(33)		21		(5)		16
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	6		(1)		5		6		(1)		5
Other comprehensive income (loss), net	6		(1)		5		6		(1)		5
Total other comprehensive income (loss), net	$	2	$	17	$	19	$	4	$	(10)	$	(6)
	Nine Months Ended						Nine Months Ended
	January 31, 2021						January 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	97	$	16	$	113	$	(40)	$	(9)	$	(49)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	97		16		113		(40)		(9)		(49)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(73)		17		(56)		53		(12)		41
Reclassification to earnings1	(21)		5		(16)		(1)		—		(1)
Other comprehensive income (loss), net	(94)		22		(72)		52		(12)		40
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		(1)		—		(1)
Reclassification to earnings2	23		(6)		17		19		(5)		14
Other comprehensive income (loss), net	23		(6)		17		18		(5)		13
Total other comprehensive income (loss), net	$	26	$	32	$	58	$	30	$	(26)	$	4

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

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

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Inventories (Policies)	9 Months Ended
	Jan. 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)	9 Months Ended
	Jan. 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 (i.e., those with a remaining term of 12 months or less) with the same counterparty on a net basis in our balance sheets. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. We do not net current derivatives with noncurrent derivatives in our balance sheet

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Earnings Per Share (Tables)

9 Months Ended

Jan. 31, 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				Nine Months Ended
	January 31,				January 31,
(Dollars in millions, except per share amounts)	2021		2022		2021		2022
Net income available to common stockholders	$	219	$	259	$	783	$	687
Share data (in thousands):
Basic average common shares outstanding	478,599		478,887		478,471		478,844
Dilutive effect of stock-based awards	2,237		1,680		2,194		1,755
Diluted average common shares outstanding	480,836		480,567		480,665		480,599
Basic earnings per share	$	0.46	$	0.54	$	1.64	$	1.43
Diluted earnings per share	$	0.45	$	0.54	$	1.63	$	1.43

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Jan. 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 nine months ended January 31, 2022:

(Dollars in millions)	Goodwill		Other Intangible Assets
Balance at April 30, 2021	$	779	$	676
Foreign currency translation adjustment	(8)		(24)
Balance at January 31, 2022	$	771	$	652

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Debt (Tables)

9 Months Ended

Jan. 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) consists of:

(Principal and carrying amounts in millions)	April 30, 2021		January 31, 2022
2.250% senior notes, $250 principal amount, due January 15, 2023	$	249	$	250
3.500% senior notes, $300 principal amount, due April 15, 2025	298		298
1.200% senior notes, €300 principal amount, due July 7, 2026	362		333
2.600% senior notes, £300 principal amount, due July 7, 2028	415		399
4.000% senior notes, $300 principal amount, due April 15, 2038	294		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	488		488
	2,354		2,311
Less current portion	—		250
	$	2,354	$	2,061

Schedule of Short-term Debt [Table Text Block]

(Dollars in millions)	April 30, 2021	January 31, 2022
Commercial paper	$195	$—
Average interest rate	0.16%	—%
Average remaining days to maturity	24	0

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Stockholders' Equity (Tables)

9 Months Ended

Jan. 31, 2022

Stockholders' Equity Attributable to Parent [Abstract]

Schedule of Stockholders Equity [Table Text Block]

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

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

The following table shows the changes in stockholders’ equity by quarter during the nine months ended January 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, 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
Net income							236						236
Net other comprehensive income (loss)									2				2
Stock-based compensation expense					3								3
Stock issued under compensation plans											1		1
Loss on issuance of treasury stock issued under compensation plans					(2)								(2)
Balance at October 31, 2021	25		47		3		3,491		(412)		(231)		2,923
Net income							259						259
Net other comprehensive income (loss)									(6)				(6)
Declaration of cash dividends							(659)						(659)
Stock-based compensation expense					4								4
Stock issued under compensation plans											2		2
Loss on issuance of treasury stock issued under compensation plans					(4)								(4)
Balance at January 31, 2022	$	25	$	47	$	3	$	3,091	$	(418)	$	(229)	$	2,519

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

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

(Dollars in millions)	Currency Translation Adjustments		Cash Flow Hedge Adjustments		Postretirement Benefits Adjustments		Total AOCI
Balance at April 30, 2021	$	(179)	$	(16)	$	(227)	$	(422)
Net other comprehensive income (loss)	(49)		40		13		4
Balance at January 31, 2022	$	(228)	$	24	$	(214)	$	(418)

Dividends Declared [Table Text Block]

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

Declaration Date	Record Date	Payable Date	Amount per Share
May 27, 2021	June 8, 2021	July 1, 2021	$0.1795
July 22, 2021	September 3, 2021	October 1, 2021	$0.1795
November 18, 2021	December 3, 2021	December 28, 2021	$0.1885
November 18, 2021	December 9, 2021	December 29, 2021	$1.0000
January 25, 2022	March 8, 2022	April 1, 2022	$0.1885

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Net Sales (Tables)

9 Months Ended

Jan. 31, 2022

Net Sales [Abstract]

Disaggregation of Revenue [Table Text Block]

The following table shows our net sales by geography:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
United States	$	425	$	488	$	1,334	$	1,400
Developed International1	292		318		789		884
Emerging2	171		196		438		533
Travel Retail3	12		25		47		74
Non-branded & bulk4	11		10		41		46
Total	$	911	$	1,037	$	2,649	$	2,937

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 Australia, Germany, 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 Russia.

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

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

The following table shows our net sales by product category:

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
Whiskey1	$	731	$	835	$	2,101	$	2,309
Tequila2	72		90		224		266
Wine3	50		54		162		176
Vodka4	26		29		71		86
Non-branded and bulk5	11		10		41		46
Rest of portfolio	21		19		50		54
Total	$	911	$	1,037	$	2,649	$	2,937

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

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

3Includes Korbel Champagne and Sonoma-Cutrer wines.

4Includes Finlandia.

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

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Pension and Other Postretirement Benefits (Tables)

9 Months Ended

Jan. 31, 2022

Retirement Benefits [Abstract]

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

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

	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(Dollars in millions)	2021		2022		2021		2022
Pension Benefits:
Service cost	$	7	$	7	$	20	$	20
Interest cost	6		5		19		16
Expected return on plan assets	(12)		(11)		(35)		(34)
Amortization of:
Prior service cost (credit)	—		—		1		1
Net actuarial loss	7		6		20		18
Settlement charge	—		—		—		1
Net cost	$	8	$	7	$	25	$	22
Other Postretirement Benefits:
Service cost	$	—	$	—	$	1	$	1
Interest cost	1		—		1		1
Amortization of prior service cost (credit)	(1)		—		(2)		(1)
Net cost	$	—	$	—	$	—	$	1

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Derivative Financial Instruments and Hedging Activities (Tables)

9 Months Ended

Jan. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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

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

		Three Months Ended
		January 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	(39)	$	23
Net gain (loss) reclassified from AOCI into earnings	Sales	4		2
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(6)	$	5
Net gain (loss) recognized in earnings	Other income (expense), net	4		(1)
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(33)	$	17
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	1,222	$	1,365
Other income (expense), net		9		4

		Nine Months Ended
		January 31,
(Dollars in millions)	Classification	2021		2022
Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI	n/a	$	(73)	$	53
Net gain (loss) reclassified from AOCI into earnings	Sales	21		1
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings	Sales	$	(11)	$	8
Net gain (loss) recognized in earnings	Other income (expense), net	15		(1)
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI	n/a	$	(66)	$	38
Total amounts presented in the accompanying condensed consolidated statements of operations for line items affected by the net gains (losses) shown above:
Sales		$	3,481	$	3,831
Other income (expense), net		13		(1)

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, 2021				January 31, 2022
(Dollars in millions)	Classification	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	4	$	(2)	$	21	$	(3)
Currency derivatives	Other assets	—		—		13		(1)
Currency derivatives	Accrued expenses	4		(18)		—		(1)
Currency derivatives	Other liabilities	1		(18)		—		—
Not designated as hedges:
Currency derivatives	Other current assets	1		—		—		—
Currency derivatives	Other assets	—		—		—		—
Currency derivatives	Accrued expenses	—		—		—		(1)
Currency derivatives	Other liabilities	—		—		—		—

Offsetting Derivative Assets and Liabilities [Table Text Block]

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

(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet		Net Amounts
April 30, 2021
Derivative assets	$	10	$	(7)	$	3	$	(1)	$	2
Derivative liabilities	(38)		7		(31)		1		(30)
January 31, 2022
Derivative assets	34		(4)		30		—		30
Derivative liabilities	(6)		4		(2)		—		(2)

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Fair Value Measurements (Tables)

9 Months Ended

Jan. 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, 2021				January 31, 2022
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets
Cash and cash equivalents	$	1,150	$	1,150	$	812	$	812
Currency derivatives	3		3		30		30
Liabilities
Currency derivatives	31		31		2		2
Short-term borrowings	205		205		16		16
Long-term debt (including current portion)	2,354		2,663		2,311		2,537

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Other Comprehensive Income (Tables)

9 Months Ended

Jan. 31, 2022

Statement of Comprehensive Income [Abstract]

Comprehensive Income (Loss) [Table Text Block]

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

	Three Months Ended						Three Months Ended
	January 31, 2021						January 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	39	$	8	$	47	$	(23)	$	(4)	$	(27)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	39		8		47		(23)		(4)		(27)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(39)		9		(30)		23		(5)		18
Reclassification to earnings1	(4)		1		(3)		(2)		—		(2)
Other comprehensive income (loss), net	(43)		10		(33)		21		(5)		16
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		—		—		—
Reclassification to earnings2	6		(1)		5		6		(1)		5
Other comprehensive income (loss), net	6		(1)		5		6		(1)		5
Total other comprehensive income (loss), net	$	2	$	17	$	19	$	4	$	(10)	$	(6)
	Nine Months Ended						Nine Months Ended
	January 31, 2021						January 31, 2022
(Dollars in millions)	Pre-Tax		Tax		Net		Pre-Tax		Tax		Net
Currency translation adjustments:
Net gain (loss) on currency translation	$	97	$	16	$	113	$	(40)	$	(9)	$	(49)
Reclassification to earnings	—		—		—		—		—		—
Other comprehensive income (loss), net	97		16		113		(40)		(9)		(49)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(73)		17		(56)		53		(12)		41
Reclassification to earnings1	(21)		5		(16)		(1)		—		(1)
Other comprehensive income (loss), net	(94)		22		(72)		52		(12)		40
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	—		—		—		(1)		—		(1)
Reclassification to earnings2	23		(6)		17		19		(5)		14
Other comprehensive income (loss), net	23		(6)		17		18		(5)		13
Total other comprehensive income (loss), net	$	26	$	32	$	58	$	30	$	(26)	$	4

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

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

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2022	Jan. 31, 2021	Jan. 31, 2022	Jan. 31, 2021
Basic and diluted earnings per share
Net income available to common stockholders	$ 259	$ 219	$ 687	$ 783
Share data (in thousands):
Basic average common shares outstanding	478,887	478,599	478,844	478,471
Dilutive effect of stock-based awards	1,680	2,237	1,755	2,194
Diluted average common shares outstanding	480,567	480,836	480,599	480,665
Basic earnings per share (dollars per share)	$ 0.54	$ 0.46	$ 1.43	$ 1.64
Diluted earnings per share (dollars per share)	$ 0.54	$ 0.45	$ 1.43	$ 1.63

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Earnings Per Share (Details Textual) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2022	Jan. 31, 2021	Jan. 31, 2022	Jan. 31, 2021
Earnings Per Share (Textual) [Abstract]
Common stock-based awards excluded from the calculation of diluted earnings per share	789	298	623	211

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Inventories (Details) - USD ($) $ in Millions	Jan. 31, 2022	Apr. 30, 2021
Inventories (Textual) [Abstract]
Excess of current costs over stated LIFO value	$ 388	$ 353

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Goodwill and Other Intangible Assets (Details) $ in Millions	9 Months Ended
	Jan. 31, 2022 USD ($)
Goodwill [Roll Forward]
Balance at April 30, 2021	$ 779
Foreign currency translation adjustment	(8)
Balance at January 31, 2022	771
Indefinite-lived Intangible Assets [Roll Forward]
Balance at April 30, 2021	676
Foreign currency translation adjustment	(24)
Balance at January 31, 2022	$ 652

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Commitments and Contingencies Guaranty (Details) - USD ($) $ in Millions	Jan. 31, 2022	Apr. 30, 2021
Concentration Risk [Line Items]
Accounts Receivable, after Allowance for Credit Loss, Current	$ 796	$ 753
Credit Concentration Risk [Member]
Concentration Risk [Line Items]
Guarantor Obligations, Maximum Exposure, Undiscounted	11
Guarantee Obligations Current Exposure	4
Accounts Receivable, after Allowance for Credit Loss, Current	$ 9

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Commitments and Contingencies Contingencies (Details) - GBP (£) £ in Millions	1 Months Ended
	Dec. 31, 2021	Apr. 30, 2021
Loss Contingencies [Line Items]
Loss Contingency, Amount Sought by Counterparty		£ 49
Loss Contingency, Amount Withheld by Counterparty		£ 50
Loss Contingency, Amount Remitted by Counterparty	£ 47

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Debt (Details) € in Millions, £ in Millions, $ in Millions	9 Months Ended	12 Months Ended
	Jan. 31, 2022 USD ($)	Apr. 30, 2021 USD ($)	Jan. 31, 2022 EUR (€)	Jan. 31, 2022 GBP (£)	Apr. 30, 2021 EUR (€)	Apr. 30, 2021 GBP (£)
Debt Instrument [Line Items]
Long-term debt, including current portion	$ 2,311	$ 2,354
Current portion of long-term debt	250	0
Long-term debt	2,061	2,354
2.25% notes, due January 15, 2023 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 250	$ 250
Debt Instrument, Maturity Date	Jan. 15, 2023	Jan. 15, 2023
Debt Instrument, Interest Rate, Stated Percentage	2.25%	2.25%	2.25%	2.25%	2.25%	2.25%
Long-term debt, including current portion	$ 250	$ 249
3.50% senior notes, due April 15, 2025 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 300	$ 300
Debt Instrument, Maturity Date	Apr. 15, 2025	Apr. 15, 2025
Debt Instrument, Interest Rate, Stated Percentage	3.50%	3.50%	3.50%	3.50%	3.50%	3.50%
Long-term debt, including current portion	$ 298	$ 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	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	$ 333	$ 362
2.60% notes, due July 7, 2028 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount | £				£ 300		£ 300
Debt Instrument, Maturity Date	Jul. 07, 2028	Jul. 07, 2028
Debt Instrument, Interest Rate, Stated Percentage	2.60%	2.60%	2.60%	2.60%	2.60%	2.60%
Long-term debt, including current portion	$ 399	$ 415
4.00% senior notes, due April 15, 2038 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 300	$ 300
Debt Instrument, Maturity Date	Apr. 15, 2038	Apr. 15, 2038
Debt Instrument, Interest Rate, Stated Percentage	4.00%	4.00%	4.00%	4.00%	4.00%	4.00%
Long-term debt, including current portion	$ 295	$ 294
3.75% notes, due January 15, 2043 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 250	$ 250
Debt Instrument, Maturity Date	Jan. 15, 2043	Jan. 15, 2043
Debt Instrument, Interest Rate, Stated Percentage	3.75%	3.75%	3.75%	3.75%	3.75%	3.75%
Long-term debt, including current portion	$ 248	$ 248
4.50% notes, due July 15, 2045 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 500	$ 500
Debt Instrument, Maturity Date	Jul. 15, 2045	Jul. 15, 2045
Debt Instrument, Interest Rate, Stated Percentage	4.50%	4.50%	4.50%	4.50%	4.50%	4.50%
Long-term debt, including current portion	$ 488	$ 488

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Debt Short-term Borrowings (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Jan. 31, 2022	Apr. 30, 2021
Short-term Debt [Abstract]
Short-term borrowings	$ 16	$ 205
Commercial Paper	$ 0	$ 195
Commercial Paper, Weighted Average Interest Rate, at Point in Time	0.00%	0.16%
Commercial Paper Borrowings, Average Remaining Maturity	0 days	24 days

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Stockholders' Equity (Details) - USD ($) $ in Millions	3 Months Ended						9 Months Ended
	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Jan. 31, 2021	Oct. 31, 2020	Jul. 31, 2020	Jan. 31, 2022	Jan. 31, 2021
Beginning balance	$ 2,923	$ 2,683	$ 2,656	$ 2,403	$ 2,150	$ 1,975	$ 2,656	$ 1,975
Net income	259	236	192	219	240	324	687	783
Net other comprehensive income (loss)	(6)	2	8	19	15	24	4	58
Declaration of cash dividends	(659)		(172)	(172)		(167)
Stock-based compensation expense	4	3	4	3	3	3
Stock issued under compensation plans	2	1	5	3	5	10
Loss on issuance of treasury stock issued under compensation plans	(4)	(2)	(10)	(7)	(10)	(19)
Ending balance	2,519	2,923	2,683	2,468	2,403	2,150	2,519	2,468
Additional Paid-in Capital [Member]
Beginning balance	3	2	0	0	0	0	0	0
Stock-based compensation expense	4	3	4	3	3	3
Loss on issuance of treasury stock issued under compensation plans	(4)	(2)	(2)	(3)	(3)	(3)
Ending balance	3	3	2	0	0	0	3	0
Retained Earnings [Member]
Beginning balance	3,491	3,255	3,243	3,082	2,849	2,708	3,243	2,708
Net income	259	236	192	219	240	324
Declaration of cash dividends	(659)		(172)	(172)		(167)
Loss on issuance of treasury stock issued under compensation plans			(8)	(4)	(7)	(16)
Ending balance	3,091	3,491	3,255	3,125	3,082	2,849	3,091	3,125
AOCI Attributable to Parent [Member]
Beginning balance	(412)	(414)	(422)	(508)	(523)	(547)	(422)	(547)
Net other comprehensive income (loss)	(6)	2	8	19	15	24
Ending balance	(418)	(412)	(414)	(489)	(508)	(523)	(418)	(489)
Treasury Stock, Common [Member]
Beginning balance	(231)	(232)	(237)	(243)	(248)	(258)	(237)	(258)
Stock issued under compensation plans	2	1	5	3	5	10
Ending balance	(229)	(231)	(232)	(240)	(243)	(248)	(229)	(240)
Common stock, Class A, voting [Member] | Common Stock [Member]
Beginning balance	25	25	25	25	25	25	25	25
Ending balance	25	25	25	25	25	25	25	25
Common stock, Class B, nonvoting [Member] | Common Stock [Member]
Beginning balance	47	47	47	47	47	47	47	47
Ending balance	$ 47	$ 47	$ 47	$ 47	$ 47	$ 47	$ 47	$ 47

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Stockholders' Equity Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended						9 Months Ended
	Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Jan. 31, 2021	Oct. 31, 2020	Jul. 31, 2020	Jan. 31, 2022	Jan. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			$ (422)				$ (422)
Net other comprehensive income (loss)	$ (6)	$ 2	8	$ 19	$ 15	$ 24	4	$ 58
Ending balance	(418)						(418)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			(179)				(179)
Net other comprehensive income (loss)	(27)			47			(49)	113
Ending balance	(228)						(228)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			(16)				(16)
Net other comprehensive income (loss)	16			(33)			40	(72)
Ending balance	24						24
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance			(227)				(227)
Net other comprehensive income (loss)	5			5			13	$ 17
Ending balance	(214)						$ (214)
AOCI Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net other comprehensive income (loss)	$ (6)	$ 2	$ 8	$ 19	$ 15	$ 24

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Stockholders' Equity Dividends (Details)	9 Months Ended
	Jan. 31, 2022 $ / shares
July 2021 dividend payment
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	May 27, 2021
Dividends Payable, Date of Record	Jun. 08, 2021
Dividends Payable, Date to be Paid	Jul. 01, 2021
Common Stock, Dividends, Per Share, Declared	$ 0.1795
October 2021 dividend payment
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	Jul. 22, 2021
Dividends Payable, Date of Record	Sep. 03, 2021
Dividends Payable, Date to be Paid	Oct. 01, 2021
Common Stock, Dividends, Per Share, Declared	$ 0.1795
December 2021 dividend payment
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	Nov. 18, 2021
Dividends Payable, Date of Record	Dec. 03, 2021
Dividends Payable, Date to be Paid	Dec. 28, 2021
Common Stock, Dividends, Per Share, Declared	$ 0.1885
April 2022 dividend payment
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	Jan. 25, 2022
Dividends Payable, Date of Record	Mar. 08, 2022
Dividends Payable, Date to be Paid	Apr. 01, 2022
Common Stock, Dividends, Per Share, Declared	$ 0.1885
December 2021 special dividend payment
Class of Stock [Line Items]
Dividends Payable, Date Declared, Month and Year	Nov. 18, 2021
Dividends Payable, Date of Record	Dec. 09, 2021
Dividends Payable, Date to be Paid	Dec. 29, 2021
Common Stock, Dividends, Per Share, Declared	$ 1.0000

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Net Sales by Geography (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2022	Jan. 31, 2021	Jan. 31, 2022		Jan. 31, 2021
Disaggregation of Revenue [Line Items]
Net sales	$ 1,037	$ 911	$ 2,937		$ 2,649
United States [Member]
Disaggregation of Revenue [Line Items]
Net sales	488	425	1,400		1,334
Developed International [Member]
Disaggregation of Revenue [Line Items]
Net sales	318	292	884	[1]	789	[1]
Emerging [Member]
Disaggregation of Revenue [Line Items]
Net sales	196	171	533	[2]	438	[2]
Travel Retail [Member]
Disaggregation of Revenue [Line Items]
Net sales	25	12	74	[3]	47	[3]
Non-branded and bulk [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 10	$ 11	$ 46	[4]	$ 41	[4]

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

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

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

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Net Sales by Product Category (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Jan. 31, 2022	Jan. 31, 2021	Jan. 31, 2022	Jan. 31, 2021
Disaggregation of Revenue [Line Items]
Net sales		$ 1,037	$ 911	$ 2,937	$ 2,649
Whiskey [Member]
Disaggregation of Revenue [Line Items]
Net sales	[1]	835	731	2,309	2,101
Tequila [Member]
Disaggregation of Revenue [Line Items]
Net sales	[2]	90	72	266	224
Wine [Member]
Disaggregation of Revenue [Line Items]
Net sales	[3]	54	50	176	162
Vodka [Member]
Disaggregation of Revenue [Line Items]
Net sales	[4]	29	26	86	71
Non-branded and bulk [Member]
Disaggregation of Revenue [Line Items]
Net sales	[5]	10	11	46	41
Rest of portfolio [Member]
Disaggregation of Revenue [Line Items]
Net sales		$ 19	$ 21	$ 54	$ 50

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

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

[3] Includes Korbel Champagne and Sonoma-Cutrer wines.

[4] Includes Finlandia.

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

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Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2022	Jan. 31, 2021	Jan. 31, 2022	Jan. 31, 2021
Pension Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Sponsor Location [Extensible List]
Service cost	$ 7	$ 7	$ 20	$ 20
Interest cost	5	6	16	19
Expected return on plan assets	(11)	(12)	(34)	(35)
Amortization of prior service cost (credit)	0	0	1	1
Amortization of net actuarial loss (gain)	6	7	18	20
Settlement loss	0	0	1	0
Net cost	7	8	$ 22	$ 25
Other Postretirement Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined Benefit Plan, Sponsor Location [Extensible List]
Service cost	0	0	$ 1	$ 1
Interest cost	0	1	1	1
Amortization of prior service cost (credit)	0	(1)	(1)	(2)
Net cost	$ 0	$ 0	$ 1	$ 0

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Income Taxes (Details)	9 Months Ended		12 Months Ended
	Jan. 31, 2022	Jan. 31, 2021	Apr. 30, 2022
Expected Tax Rate on Ordinary Income	22.70%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%
Effective Income Tax Rate Reconciliation, Percent	23.40%	16.20%
Forecast [Member]
Expected Tax Rate on Ordinary Income			22.70%

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Derivative Financial Instruments and Hedging Activities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jan. 31, 2022	Jan. 31, 2021	Jan. 31, 2022	Jan. 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	$ 1,365	$ 1,222	$ 3,831	$ 3,481
Other income (expense), net	4	9	(1)	13
Foreign Currency Denominated Debt [Member]
Foreign currency-denominated debt designated as net investment hedge: [Abstract]
Net gain (loss) recognized in AOCI	17	(33)	38	(66)
Currency derivatives [Member]
Currency derivatives designated as cash flow hedges: [Abstract]
Net gain (loss) recognized in AOCI	23	(39)	53	(73)
Currency derivatives [Member] | Sales [Member]
Currency derivatives designated as cash flow hedges: [Abstract]
Net gain (loss) reclassified from AOCI into earnings	2	4	1	21
Currency derivatives not designated as hedging instruments: [Abstract]
Net gain (loss) recognized in earnings	5	(6)	8	(11)
Currency derivatives [Member] | Other Income [Member]
Currency derivatives not designated as hedging instruments: [Abstract]
Net gain (loss) recognized in earnings	$ (1)	$ 4	$ (1)	$ 15

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Derivative Financial Instruments and Hedging Activities (Details 1) - USD ($) $ in Millions	Jan. 31, 2022	Apr. 30, 2021
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	$ 34	$ 10
Derivative Liability, Fair Value, Gross Liability	6	38
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	21	4
Derivative Liability, Fair Value, Gross Liability	(3)	(2)
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	13	0
Derivative Liability, Fair Value, Gross Liability	(1)	0
Currency derivatives [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Accrued Expenses [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	4
Derivative Liability, Fair Value, Gross Liability	(1)	(18)
Currency derivatives [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Other Liabilities [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	1
Derivative Liability, Fair Value, Gross Liability	0	(18)
Currency derivatives [Member] | Not designated as hedges [Member] | Other Current Assets [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	1
Derivative Liability, Fair Value, Gross Liability	0	0
Currency derivatives [Member] | Not designated as hedges [Member] | Other Assets [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	0	0
Currency derivatives [Member] | Not designated as hedges [Member] | Accrued Expenses [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	(1)	0
Currency derivatives [Member] | Not designated as hedges [Member] | Other Liabilities [Member]
Fair values of derivative instruments
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	$ 0	$ 0

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Derivative Financial Instruments and Hedging Activities (Details Textual) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jul. 31, 2021	Jan. 31, 2022	Apr. 30, 2021
Derivative Financial Instruments (Textual) [Abstract]
Maximum term of outstanding derivative contracts	36 months	36 months
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months		$ 15
Aggregate fair value of derivatives with creditworthiness requirements that were in a net liability position		2	$ 30
Designated as Hedging Instrument [Member] | Net Investment Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Debt Instrument, Face Amount		676	680
Foreign Exchange Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Notional Amount		$ 860	$ 1,218

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Offsetting Derivative Assets and Liabilities (Details) - USD ($) $ in Millions	Jan. 31, 2022	Apr. 30, 2021
Offsetting Assets and Liabilities [Line Items]
Gross Amount of Derivative Assets	$ 34	$ 10
Gross Amount of Derivative Liabilities Offset Against Derivative Assets in Balance Sheet	(4)	(7)
Net Amount of Derivative Assets Presented in Balance Sheet	30	3
Gross Amount of Derivative Liabilities Not Offset Against Derivative Assets in Balance Sheet	0	(1)
Net Amount of Derivative Assets	30	2
Gross Amount of Derivative Liabilities	(6)	(38)
Gross Amount of Derivative Assets Offset Against Derivative Liabilities in Balance Sheet	4	7
Net Amount of Derivative Liabilities Presented in Balance Sheet	2	31
Gross Amount of Derivative Assets Not Offset Against Derivative Liabilities in Balance Sheet	0	1
Net Amount of Derivative Liabilities	$ 2	$ 30

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Fair Value Measurements (Details) - USD ($) $ in Millions	Jan. 31, 2022	Apr. 30, 2021
Assets:
Cash and cash equivalents, Carrying Amount	$ 812	$ 1,150
Cash and cash equivalents, Fair Value	812	1,150
Liabilities:
Short-term borrowings, Carrying Amount	16	205
Short-term borrowings, Fair Value	16	205
Long-term debt (including current portion), Carrying Amount	2,311	2,354
Fair Value, Inputs, Level 2 [Member]
Assets:
Currency derivatives, Fair Value	30	3
Liabilities:
Currency derivatives, Fair Value	2	31
Long-term debt (including current portion), Fair Value	2,537	2,663
Foreign Exchange Contract [Member]
Assets:
Currency derivatives, Carrying Amount	30	3
Liabilities:
Currency derivatives, Carrying Amount	$ 2	$ 31

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Impairment Charge (Details) $ in Millions	9 Months Ended
	Jan. 31, 2022 USD ($)
Fair Value Disclosures [Abstract]
Tangible Asset Impairment Charges	$ 9

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Other Comprehensive Income (Details) - USD ($) $ in Millions		3 Months Ended						9 Months Ended
		Jan. 31, 2022	Oct. 31, 2021	Jul. 31, 2021	Jan. 31, 2021	Oct. 31, 2020	Jul. 31, 2020	Jan. 31, 2022	Jan. 31, 2021
Before Tax:
Net other comprehensive income (loss)		$ 4			$ 2			$ 30	$ 26
Tax Effect:
Net other comprehensive income (loss)		(10)			17			(26)	32
Net of Tax:
Net other comprehensive income (loss)		(6)	$ 2	$ 8	19	$ 15	$ 24	4	58
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Before Tax:
Net gain (loss)		(23)			39			(40)	97
Reclassification to earnings		0			0			0	0
Net other comprehensive income (loss)		(23)			39			(40)	97
Tax Effect:
Net gain (loss)		(4)			8			(9)	16
Reclassification to earnings		0			0			0	0
Net other comprehensive income (loss)		(4)			8			(9)	16
Net of Tax:
Net gain (loss)		(27)			47			(49)	113
Reclassification to earnings		0			0			0	0
Net other comprehensive income (loss)		(27)			47			(49)	113
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Before Tax:
Net gain (loss)		23			(39)			53	(73)
Reclassification to earnings	[1]	(2)			(4)			(1)	(21)
Net other comprehensive income (loss)		21			(43)			52	(94)
Tax Effect:
Net gain (loss)		(5)			9			(12)	17
Reclassification to earnings	[1]	0			1			0	5
Net other comprehensive income (loss)		(5)			10			(12)	22
Net of Tax:
Net gain (loss)		18			(30)			41	(56)
Reclassification to earnings	[1]	(2)			(3)			(1)	(16)
Net other comprehensive income (loss)		16			(33)			40	(72)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Before Tax:
Net gain (loss)		0			0			(1)	0
Reclassification to earnings	[2]	6			6			19	23
Net other comprehensive income (loss)		6			6			18	23
Tax Effect:
Net gain (loss)		0			0			0	0
Reclassification to earnings	[2]	(1)			(1)			(5)	(6)
Net other comprehensive income (loss)		(1)			(1)			(5)	(6)
Net of Tax:
Net gain (loss)		0			0			(1)	0
Reclassification to earnings	[2]	5			5			14	17
Net other comprehensive income (loss)		$ 5			$ 5			$ 13	17
Gain on sale of business [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Before Tax:
Reclassification to earnings									$ 4

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

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