Enduring Spirits.
BOLD PERSPECTIVES.

2 0 2 2 I N T E G R AT E D A NN U A L R E P O R TOUR GLOBAL
Perspective

5,200

EMPLOYEES

on 6 continents

170+

COUNTRIES

where ourbrands are sold51%

OF SALES

outside the U.S.

25+

PRODUCTION
FACILITIES

around the world

BOLD THINKING.
INNOVATIVE IDEAS.
Diverse Points Of View.
All have been enabling our business to endure and thrive for more than 150 years.
Today is no different, and the opportunities before us have never been more exciting.
We believe we have positioned our iconic brands and portfolio to align with changing
market and consumer preferences. We’re pursuing abundant opportunities to grow ourbusiness across the globe and to do so with our values at the forefront.
It’s not just our spirits and wines that are strong in character and complexity. It’s ourpeople who bring bold perspectives and will drive our next generation of growth,delivering positive environmental, social, and business impact.
In this year’s report, we invite you to hear directly from some of these individuals about
how we’re transforming opportunity into value for our enduring spirits.
1

NOTHING BETTER.
In The Market.

Dear Shareholders,
The theme of this year’s integrated annual report is “Enduring Spirits.
Bold Perspectives.”
The first of those two sentiments — Enduring Spirits — was borrowed from our2009 annual report. It was used then to describe a fiscal year that tested our resolve,
while also reaffirming that Brown-Forman is a resilient business that can grow andprosper even under the most challenging circumstances. While the circumstances
differ, much of the same holds true for fiscal 2022, when our portfolio of brands
experienced very strong consumer demand despite difficult and ever-changing
business conditions.
The second phrase — Bold Perspectives — honors the people of Brown-Forman andthe innovative thinking, creative ideas, and diverse viewpoints that have helped us toflourish since our founding in 1870. Our dedicated people, our long-term shareholders,and our valued business partners enable our brands and our company to excel. They
thrive in challenging circumstances and, in doing so, give our company character andcomplexity, purpose and perseverance, agility and authenticity.

BROWN-FORMAN
2022 Integrated Annual Report

It is the unique combination of our Enduring Spirits and our Bold Perspectives thatmade fiscal 2022 one of the most notable in Brown-Forman’s recorded history.
This year, even amongst the many challenges of the pandemic, supply chain
disruptions, and geopolitical uncertainty, Brown-Forman delivered reported net
sales growth of 14% (17% organic) and reported operating income growth of
3% (27% organic).*

2* In this report, we present both reported (GAAP) and organic (non-GAAP) changes in certain
measures, or line items, of the statements of operations. We use these measures as
supplements to (not substitutes for) our results of operations and other measures
reported under GAAP. To calculate these measures, we adjust, as applicable for(a) acquisitions and divestitures, (b) foreign exchange, (c) impairment
charges, and (d) a commitment to the Brown-Forman
Foundation. Please refer to the section labeled“Non-GAAP Financial Measures” in Form
10-K of the enclosed report for
additional information.

It is for these reasons, and so many more, that we
believe Brown-Forman continues to be a sound, reliable,
and attractive investment for our shareholders as we
continue to deliver top-tier returns over the long term.
Delivering Top-Tier Returns for Shareholders
Delivering
Top-Tier
Returns for Shareholders
Over
the Past
DecadeOver the Past Decade
Consumer Staples

12%

Competitive Set

13%

14%

S&P 500

BFB

14%

2021
Source: Factset, 10-year
April 30, 2022,
in local currency,
assuming dividends
2020
2019
2018CAGR throughreinvested. Note — Competitive Set is a weighted average based upon each competitor’s last
12 months’ sales
Our ability to deliver very strong double-digit top-line
and bottom-line organic growth in fiscal 2022 is theresult of many years of thoughtful, strategic planningcombined with creative problem solving and agility
under pressure. With our focus on the long term, we
made a conscious and, some may say, bold decision toinvest in building consumer demand and driving salesof our premium and super-premium brands, even as
challenging headwinds applied continued pressure on
our margins and operating income. In fiscal 2022, Jack
Daniel’s Tennessee Whiskey saw reported net sales
growth of 20% (23% organic), and Woodford Reserve,
Herradura, el Jimador, and our 152-year old founding
brand, Old Forester, also delivered double-digit
reported and organic net sales growth.
Even if you were to look back from the start of thepandemic, when the on-premise channel virtually
shut down around the world, Brown-Forman and ourpeople never faltered. We delivered an average of 6%*reported net sales growth for the three-year period
through fiscal 2022, in line with our long-term growthambitions. Importantly, this growth came from acrossthe globe, with the U.S. averaging 7%* reported net
sales growth alongside strong performances from
our international developed markets and emerging
markets, which grew reported net sales at an averagerate of 7%* and 6%*, respectively.
*Compound annual growth rate

Yet what makes Brown-Forman truly remarkable
is that we have delivered more than just soundbusiness performance; we have done it by living a
spirit of commitment to our people, our communities,
and our environment. Earlier this year, the BrownForman Foundation announced a $50 million financial
commitment in support of five organizations in west
Louisville, home to our company’s headquarters,
to advance educational opportunities from earlychildhood through adult learning. We renewed ourcommitment to the United Nations Global Compact,
and continue to make steady progress against ourelevated environmental commitments. We remained
steadfast in our dedication to responsible consumption
through our internal Pause campaign and partnershipwith organizations like the International Alliance for
Responsible Drinking. And, remarkably, we achieved our
Many Spirits, One Brown-Forman 2030 ambition to have
40% female representation among our senior leaders,
eight years ahead of schedule.
As I close, I do so with great admiration and respect
for the people of Brown-Forman, whose tremendous
passion for our business is the overriding reason forour success. To my colleagues across the organization,
thank you for the many talents that underline ourresults and the countless contributions that drive ourgrowth. To my Executive Leadership Team, including
those who will retire soon and those who are new to theteam, thank you for guiding this organization with equalparts care, competence, compassion, and courage.
Finally, to our Board of Directors, valued investors,
and all those around the world who have maintained
support and belief in Brown-Forman through theuncertainty of the last few years, I am forever gratefulfor your confidence and your trust. I hope the pagesof this report reaffirm for you what they have for me.
Brown-Forman endures because of the strength of ourbrands, the consistency of our performance, and thespirit of our timeless values. Brown-Forman thrives
because of the bold people and bold perspectives
that courageously propel us forward, generation aftergeneration. There is, without question, “Nothing Betterin the Market.”With respect and appreciation,
LAWSON E. WHITING
President and Chief Executive Officer3

TO ENDURE.
And Be Bold.

Dear Shareholders,
The introduction of the word “bold” into our vocabulary,alongside the more familiar notion of enduring, defines
our approach to both leadership and decision-making
within Brown-Forman. This year’s integrated annual
report focuses on how bold decision-making shaped
not only this fiscal year, but also the choices that have
served our shareholders, employees, and communities
across 15 decades.
Reflecting upon this past year, I’m struck by how being
bold has long defined who we are as a company. We
were bold when we put whiskey in a sealed glass bottle
as a promise of quality and consistency, bold when we
survived U.S. Prohibition with a medicinal permit, andbold when we quickly converted a still at the Jack DanielDistillery to make ethanol needed for hand sanitizer in thefight against COVID-19, just to share a few examples.

BROWN-FORMAN
2022 Integrated Annual Report

Being bold has clearly made us stronger, more resilient,and better equipped to deliver strong financial
performance today and to continue investing in ourbrands, people, and communities for the future. It hasenabled us to seize immediate growth opportunities
while also being committed to the long-term healthand endurance of our company.

4

During this fiscal year, we made bold investments inour brands to ensure their long-term relevance andsuccess. We protected and accelerated their positive
momentum despite significant challenges in our industry
and society. We increased our marketing investment
and shared more stories with more consumers acrossthe globe. Our campaigns — Jack Daniel’s “Make It
Count,” Woodford Reserve’s “Spectacle for the Senses,”
Herradura’s “Extraordinary Awaits,” and Old Forester’s“Never Gets Old” — have strengthened our connections
with billions of consumers with their messages ofquality, excellence, and enriching life.

We also made bold investments in our people andtheir capabilities as brand-builders. We expanded
our emerging brands group into Europe, successfully
accelerating growth across our super-premium
portfolio. We established an integrated marketing
center of excellence, bringing together the talent,creativity, and connection points needed to meet
consumers in new ways and novel places. These boldinvestments in capabilities ensure our people will havethe skills they need to reach their fullest potential anddeliver their best ideas to the business.
Being bold means making investments in ourcommunities to create opportunities for others. In
our hometown of Louisville, we initiated a $50 million
investment to advance educational opportunities
from “cradle through career” over the next decade.
This commitment will offer the space and security forfive highly respected partners to help transform ourcommunity and make a long-lasting difference in the
lives of those in it.
Being bold also means rewarding our shareholders fortheir enduring support over the years, decades, andgenerations by declaring a special cash dividend of $1
per share, a total of approximately $480 million, on ourClass A and Class B common stock. As a proud Dividend
Aristocrat, we marked the 38th consecutive year of
dividend increases and 78th year of quarterly dividend
payments at the company.
To both endure and be bold is what makes BrownForman special. We value diversity of thought andperspective. We care as much about each other and theworld around us as we do about making and marketing
the world’s best spirits. We believe in a long-held
sentiment, passed down through the generations, that“no one of us is as smart as all of us.” Like the making ofour bold spirits, we blend a diversity of ingredients andinspiration, balancing tradition and new possibilities,
applying timeless values to timely issues, and looking
toward the distant horizon while also seeing andsecuring opportunities around the next corner.

Being bold also means rewarding
our shareholders for their enduring
support over the years, decades, andgenerations by declaring a special
cash dividend of $1 per share, a totalof approximately $480 million, on ourClass A and Class B common stock. As aproud Dividend Aristocrat, we marked
the 38th consecutive year of dividend
increases and 78th year of quarterly
dividend payments at the company.”
As you will read in the pages of this report, weare emboldened in our commitments to diversity
and inclusion, environmental sustainability, alcohol
responsibility, and community relations. These
environmental, social, and governance (ESG)
topics are integrated into our Board agenda andcompany strategy.
You will also see how our solid corporate governanceunderpins our endurance. We thoughtfully leverage
the wisdom of our Brown family directors with theperspectives of our independent directors, bothof whom remain steadfast in their support of our
independence. This year we will say farewell to Patrick
Bousquet-Chavanne, with deep appreciation for his
17 years of dedicated Board service to Brown-Forman
and our shareholders, while welcoming Jan Singer andher consumer, retail, and brand-building expertise andperspective to the Board of Directors.
As I pause to consider this initial year in a new role, I feeloverwhelming gratitude. I am grateful for the qualityof our Board of Directors, company leaders, brandbuilders, spirit makers, and the entire Brown-Forman
community. I’m grateful for how generously you shareyour gifts and talents, all in service of creating longterm value for our shareholders and enriching the livesof our many stakeholders. I am truly grateful for eachof you, and the role you have, in making our company
bolder and better each day.

CAMPBELL P. BROWN
Chair of the Board
5

A GOVERNANCE MODEL.
For The Future.
For more than a century, Brown-Forman has
remained an independent, family-controlled,
and publicly traded company. We enjoy a strong
relationship with our family shareholders, theBrown family. Along with our independent
directors, four members of the family —representing our founder’s fifth generation ofdescendants — serve on our Board.
Long-term growth demands a long-term
perspective. We view our status as a familycontrolled, publicly traded company as a
distinct competitive advantage. Brown family
shareholders bring a long-term ownership
perspective to the Board and the company — one
that is essential to our growth and independence
and that aligns with our sustainability andresponsibility commitments, as well as longterm shareholder interests.
This perspective has enabled the company todeliver industry-leading returns on invested

capital and has made Brown-Forman a reliable
source for growth with a long-term commitment
to all of our shareholders.
We are proud to be a member of the prestigious
S&P 500 Dividend Aristocrats Index, having paid
regular quarterly cash dividends for 78 years andincreased the dividend for 38 consecutive years.
Over the past 10 years, we have returned$7.1 billion in cash to shareholders with
$2.9 billion in regular dividends and $2.4 billion
in share repurchases. We have also paid
$1.8 billion in special dividends, which includes
the special cash dividend of $1 per share, orapproximately $480 million, on our class A
and Class B common stock, that was declaredin fiscal 2022.
We believe our capital allocation philosophy andstrategic priorities will continue to drive superior
returns for years to come.

BROWN-FORMAN
2022 Integrated Annual Report

BROWN-FORMAN/BROWN FAMILY Shareholders Committee

6

Pictured: Clay Kannapell, Cary Brown, Martin Brown Jr., Robinson Brown IV, McCauley Adams, Dace Polk Brown, Owsley Brown III, Campbell P. Brown, Sandra Frazier, Garvin
Deters, Tammy Godwin, and Tanya Carrico. Not pictured: Jim Joy, Elaine Musselman, and Lawson Whiting. Also Pictured: Members of the Next Gen Committee, Keo Brown,
Charles Joy, and Davis Kannapell.

BROWN-FORMAN Board of Directors

Patrick BousquetChavanne, President
and CEO, Americas,
eShopWorld (3,5)

Campbell P. Brown,
Chair of the Board,
Brown‑Forman
Corporation (1,5,*,#)

Michael J. Roney, Retired Jan E. Singer, Former
Chief Executive Officer,
Chief Executive Officer,
Bunzl plc (4,5)
J.Crew (3)Stuart R. Brown,
John D. Cook, Director
Managing Partner, Typha Emeritus, McKinsey &Partners, LLC (#)
Company (1,2,4,5)Tracy L. Skeans, Chief
Operating Officer andChief People Officer,
Yum! Brands, Inc. (3,4)

Michael A. Todman,
Retired Vice Chairman,
Whirlpool Corporation(3,5)

Marshall B. Farrer,
SVP, President,
Europe, Brown‑Forman
Corporation (#)

Augusta Brown Holland,
Founding Partner,
Haystack Partners LLC (#)

Lawson E. Whiting,President and Chief Executive
Officer, Brown‑Forman
Corporation (1,*)(1) Member of Executive Committee of the Board of Directors, (2) Lead Independent Director, (3) Member of Audit Committee, (4) Member of Compensation
Committee, (5) Member of Corporate Governance and Nominating Committee, (*) Member of Brown-Forman/Brown Family Shareholders Committee,(#) Member of the Brown Family

BROWN-FORMAN Executive Leadership Team

Lawson E. Whiting,President and Chief
Executive Officer

Matias Bentel,
Leanne D. Cunningham,
SVP, Chief Brands Officer SVP, Chief Financial
Officer

Kirsten M. Hawley,
SVP, Chief People,
Places, andCommunications Officer

John V. Hayes,
SVP, President, USA
and Canada

Ralph E. de Chabert,
SVP, Chief Corporate
Citizenship Officer

Marshall B. Farrer,
SVP, President, Europe

Matthew E. Hamel,
EVP, General Counsel

Thomas W. Hinrichs,
Timothy M. Nall,
SVP, President, Emerging SVP, Chief Global Supply
International
Chain and Technology
Officer

7

ENDURING BRANDS.
Bold Innovation.

BROWN-FORMAN
2022 Integrated Annual Report

Brown-Forman’s business isresilient, our portfolio is solid,
and our performance in fiscal
2022 was very strong.

8In addition, newer generations of legal-drinking-age
consumers have a strong interest in many aspects of healthand wellness. This translates into increased preferences
for consuming less, but higher-quality, spirits.
Our portfolio, which consists largely of premium andsuper-premium brands, is benefiting from — andresponding to — these trends. Woodford Reserve is theworld’s top-selling super-premium American whiskey byvolume and value, according to IWSR 2021 data.*

Even in a challenging and volatile environment, including
supply chain disruptions and the ongoing pandemic, wehave experienced strong growth over the past two years.
We believe that several recent headwinds are becoming
tailwinds. For example, after more than three years, tariffs
on American whiskey in the European Union and United
Kingdom were finally lifted. These tariffs disproportionately
impacted Brown-Forman, as the largest exporter ofAmerican whiskey, and we believe their removal will restore
a level playing field for American whiskey in Europe. We also
continued to mitigate supply chain impacts related to glass
availability and saw improvement in this area as we ended
the fiscal year.
The spirits business continues to be a highly attractive
one. Based on International Wine and Spirits Record (IWSR)
2021 data, spirits continued to gain value share frombeer and wine and now comprise 40% of the beveragealcohol category and are forecast to continue gaining
share over the next five years. We continue to see strong
consumer demand in both the American whiskey andtequila categories, as well as the ready-to-drink (RTD)
category, where our portfolio is well-positioned in termsof brand popularity. The gradual return of travel, as wellas the reopening of bars, pubs, and restaurants in many
parts of the world, has led to a resurgence of on-premise
consumption, further enhancing our results. We are
strategically poised to capitalize on these trends, with aportfolio of strong brands in dynamic, growing categories.

Elevating Our Premium Offerings
Throughout the pandemic and during this period of
inflation, when people may be less inclined to spend moneyon travel and other forms of entertainment, spirits remain
an affordable, everyday luxury. Even as consumers returnto on-premise purchasing, the routines they establishedin the early days of the pandemic have remained, such as
mixing cocktails at home, ordering beverage alcohol to bedelivered, or trading up to more premium spirits brands.

We are optimistic about future growth for our othersuper-premium American whiskey brands, including
Gentleman Jack and Jack Daniel’s Single Barrel, as well
as GlenDronach, Benriach, and Glenglassaugh single
malt scotches, Tequila Herradura, Slane Irish whiskey,
and Fords Gin. We have grown the number of employees
dedicated to our emerging super-premium brands in
Europe, Australia, and China, and deepened investments
in digital marketing and e-commerce capabilities.
Our portfolio is well-positioned, and our business is
beginning to benefit from price increases on a number ofour brands in the U.S., including Jack Daniel’s Tennessee
Whiskey. We are seeing this new pricing reflected in U.S.
market data. Based on the latest Nielsen data, BrownForman is outpacing total distilled spirits pricing growthand is a pricing leader.

Delivering Convenience and Originality
Amid the increasing prominence of spirits compared toother beverage alcohol categories, we are starting to see a
blurring of categories themselves, such as beer, wine, andspirits being packaged and delivered in new ways.
RTD products are helping meet this convergence ofpremiumization, convenience, and innovation. In the past
five years, RTDs have been the fastest-growing beveragealcohol category and are expected to grow faster than Total
Distilled Spirits through 2026, based on forecasts fromIWSR 2021. We believe that this category has strong, lasting
potential, especially in some of our largest markets outside
the U.S., including Australia, Germany, Mexico, and the U.K.
Given that we have been investing in RTDs for nearly
30 years, we are well-positioned to be a leader in thissegment of the market. In fiscal 2022, we added Part Time
Rangers to our RTD portfolio in Australia and expanded
our distribution of Jack Daniel’s spirit-based cocktails
in the U.S. Jack Daniel’s Can Cocktails have experienced
rapid growth and strong consumer interest since being
introduced in 2020.

*IWSR provides a global spirits pricing segmentation methodology based on retail shelf price that provides the beverage alcohol industry with common points of reference.
The actual price paid by a consumer varies by country, but, as an example, in the United States a premium brand is defined as having a retail price between $22.50-$29.99
USD. A super-premium brand is priced between $30-$44.99 USD.

9

JACK DANIEL’S: A LONG LEGACY AND A BOLD FUTURE
Today, Jack Daniel’s Tennessee Whiskey is the largest premium spirit brand in the world by volume based on IWSR 2021.
In fiscal 2022, the brand’s iconic expression saw a 20% increase in reported net sales (+23% organic), and Jack Daniel’s
Tennessee Honey, Jack Daniel’s Tennessee Fire, and Jack Daniel’s Tennessee Apple brands collectively delivered double-digit
reported and organic net sales growth. This performance was remarkable and led the company’s performance.

Perspective

While Jack Daniel’s transcends the whiskey category, there is still significant opportunity for its growth both geographicallyand in relation to other top whiskey brands. Over the past 10 years, the super-premium+ whiskey category has more thandoubled to reach almost $19 billion in value and is expected to increase by almost 50% over the next five years, based on IWSR
2021. Gentleman Jack, Jack Daniel’s Single Barrel, and the recently launched Jack Daniel’s Bonded Tennessee Whiskey andTriple Mash Blended Straight Whiskey have the opportunity to capture their share of this large, growing market, and we’reconfident in our strategy to do so.

HOW WE GROW A BRAND
OVER 150 YEARS OLD AT
A DOUBLE-DIGIT RATE

Q: Brown-Forman’s vision is to build Jack Daniel’s into the world’s mostvaluable and iconic premium spirit brand. How do you plan to do this?
A: Jack Daniel’s is already the number one premium spirit brand globally,
and our goal is to maintain that position, in addition to continuously
reinforcing the brand’s iconic status with consumers. We are focusing on threestrategic priorities: grow Jack Daniel’s Tennessee Whiskey, accelerate thepremiumization of the portfolio, and expand to new consumers and occasions.
The key enablers to do that are: development of relevant, meaningful, engaging,and consumer-centric messaging; investment in broad reach in order to drive
penetration; brand portfolio development, including an impactful innovation
pipeline; and, finally, pricing leadership to drive long-term value growth.
Q: What does bold perspectives mean to you?
A: To be willing to take a fresh approach on one of the most iconic brands inthe world. In October 2021, we effectively relaunched a 150-year-old brand,honoring its legacy, but also looking to the future, capturing the hearts andminds of the next generation of consumers. To help us do that, we embarked
on a new partnership with best-in-class creative agency Energy BBDO andlaunched a “globally led, locally infused” creative development model new to
Brown-Forman. This led to the first truly global campaign for Jack Daniel’s
and the doubling of media spend to support its launch. To date, our research
indicates positive shifts in brand awareness and association in just a shorttime, as well as broad appeal across multicultural groups.

BROWN-FORMAN
2022 Integrated Annual Report

Sophia Angelis,
SVP, Managing Director,
Jack Daniel’s Brands

10

Q: Where are you finding opportunities to innovate?
A: While Jack Daniel’s is an iconic brand that has stood the test of time, we
continue to develop, broaden, and strengthen the Jack Daniel’s portfolioof brands in order to be best placed to leverage long-term growth. We
innovate across the portfolio. Jack Daniel’s Tennessee Honey and Jack
Daniel’s Tennessee Apple, at 2.8 million 9L cases combined, are among themost successful innovations in the history of Brown-Forman. With our RTD
portfolio, we innovate across flavors, ingredients, and formats. These newofferings are already finding new audiences in the U.S. with the national
launch of our spirit-based Jack Daniel’s RTDs and, in emerging markets
such as India and Brazil, with our super-premium portfolio. We leverage the
150 years of being masters of our craft and the deep experience of whiskey
making by Chris Fletcher (Master Distiller) and Lexie Amacher-Phillips(Assistant Distiller) to launch new super-premium expressions such as
Jack Daniel’s Bonded Tennessee Whiskey and Triple Mash Blended Straight
Whiskey.

A RECORD YEAR FOR
A STRONG BRAND.
JACK DANIEL’S TENNESSEE WHISKEY

20% reported net
sales growth infiscal 2022
Most Valuable Global
Spirits Brand Line­— IWSR 2021
14 million
9L cases sold in
fiscal 2022
Largest premium
spirit brand by
volume in the world— IWSR 2021

American Whiskey
projected to continue
taking share fromTotal Distilled Spirits— IWSR 2021
Jack Daniel’s
10-Year-Old LaunchedFirst Age-Stated
Whiskey In Over
100 Years#81 Most Valuable
Brand in the World— Interbrand 2021

11

MORE BRAND STRENGTH.
More Diversified Growth.
Less than 10 years ago, Brown-Forman’s growth was driven largely by
the Jack Daniel’s family of brands. Today, that growth is shared across
many brands as a result of the deliberate and purposeful shaping of ourportfolio over time. Here are a few highlights from across our portfolio
in fiscal 2022.

AMERICAN WHISKEY

BROWN-FORMAN
2022 Integrated Annual Report

Brown-Forman is the global leader in American whiskey with four of the top 10
brands in the category. The category increased 10% in the past year, according
to IWSR 2021 data, with Brown-Forman outpacing this growth. Woodford
Reserve, which again grew reported net sales by double digits, is the world’s
number-one super-premium American whiskey by volume and value, based on
IWSR 2021. The brand celebrated its 25th anniversary in 2021 and was named
World Whisky Brand Champion of 2021 by The Spirits Business. In addition,
fiscal 2022 marked Woodford Reserve’s fifth year as Presenting Sponsor of the
Kentucky Derby, which has become a major platform for the brand. Old Forester
continues to contribute double-digit reported net sales growth, and the Old Forester
117 expression was named number four on Vinepair’s 50 Best Spirits of 2021.

12

TEQUILA
Tequila is one of the fastest-growing spirits categories, and Herradura andel Jimador remain among the category’s best-known brands. Globally, Herraduraand el Jimador grew reported net sales by 29% and 27%, respectively, during theyear. In the U.S., our tequila brands delivered solid double-digit reported net sales
growth, with even faster growth internationally. These authentic brands align wellwith Brown-Forman’s portfolio of spirits deeply tied to tradition and place. Our
premium tequila brand, Herradura, is benefiting from premiumization trends. We are
expanding our distillation operations in Mexico to support the continued growth of
our tequila brands.

GIN
Fords Gin has benefited from the reopening of the on-premisechannel, growing reported net sales by double digits. Fords is abartenders’ favorite and has won 28 awards in the last five years,
including a coveted Double Gold medal at the 2020 San Francisco
World’s Spirits Competition and the number five ranking on Vinepair’s
50 Best Spirits of 2021. We continue to seed this brand in markets
across the globe, including the U.K., Germany, France, and Australia,
with many more to come.

SCOTCH AND IRISH
WHISKEY
Among the more recent additions to
our portfolio, Slane Irish Whiskey and
the GlenDronach, Benriach, andGlenglassaugh single malt scotches are
well-positioned in categories where wehave enjoyed consistent double-digit
growth for over the last 10 years. Our
scotch brands, in particular, are highly
regarded by whiskey lovers around theworld.
The GlenDronach announced thelimited release of its first-ever 50-YearOld Single Malt, the Highland distillery’s
oldest and rarest whisky to date.
Distilled in 1971, this expression
represents a milestone in the near
200-year history of The GlenDronachDistillery. Only a small number of casks
were chosen to reach such a celebrated
age, and just 198 bottles were available
worldwide. Meanwhile, Slane Irish
Whiskey named its first Master Distiller,
Gearóid Cahill, and launched a limitededition whiskey that celebrates 40 years
of Slane Castle’s musical history.

13

A WORLD OF Opportunity.

BROWN-FORMAN
2022 Integrated Annual Report

Though our heritage goes back generations in the U.S., we also have a world ofopportunity in global markets. In fact, it’s just been in the past 30 years that
Brown-Forman began our international expansion. Yet, today, we are a global
company, with slightly more than half of our net sales coming from outside theU.S. and Jack Daniel’s worldwide leadership firmly established. Our opportunity is
to build upon this position as we extend our broader portfolio globally.

14

United States

Developed International Markets

Brown-Forman’s home market in the U.S. remains themost valuable spirits market in the world. Our longterm net sales ambition for achieving mid-single-digit
growth is based on an expectation of continued growthin the U.S. The U.S. business delivered low-double-digit
reported and organic net sales growth in the fiscal year,
driven by volume growth for Jack Daniel’s Tennessee
Whiskey and the continued reopening of the on-premisechannel. In addition, the premiumization trend benefited
our premium bourbons led by Woodford Reserve and Old
Forester, as well as Herradura and el Jimador. Premium+tequila is among the fastest-growing spirits categories
and continues to gain share. Beyond the spirits
categories, we are pleased to say that Sonoma-Cutrer
returned to growth as the reopening of the on-premisechannel drove an increase in volume.

In fiscal 2022, Brown-Forman’s developed international
markets, which include Germany, Australia, the U.K.,
and France, delivered double-digit reported and organic
net sales growth, led by the continuous momentum of
the Jack Daniel’s family of brands. Our emerging brands
model has helped drive this performance, allowing us
to expand the footprint of our super-premium+ brands,
such as Woodford Reserve, in Europe. Specific country
highlights include:Australia — Increased brand investment behindsuper-premium brands and expanding premium RTD
portfolio, which grew market share in fiscal 2022.
U.K. and Germany — Added organizational resources
and incremental marketing investments to elevateemerging brands in these key markets, increasing
the footprint of these brands and leading to high-single-digit reported (strong double-digit organic) net
sales growth.
Korea — Growth is being led by a consumer shift fromlocal to international brands, particularly whiskey
brands, which is benefiting products that include Jack
Daniel’s Tennessee Honey.

Emerging International Markets
Emerging international markets, including
Mexico, Brazil, Chile, Poland, Turkey, andSoutheast Asia, are in varying states ofrecovery from the pandemic, yet were able todeliver strong double-digit reported net sales
growth. Medium-term trends and our recent
performance indicate that these markets willcontinue to be an increasingly important partof our long-term growth. Fiscal 2022
highlights include:In fiscal 2022, Russia represented 1% of ourreported net sales. In response to the Russian
invasion of Ukraine in late February 2022, we
suspended our sales and marketing efforts in
Russia. We continue to monitor the situation
to determine if, and when, we may be able toreestablish our presence at some point in
the future.

Perspective

Mexico — Increased market share anddouble-digit growth of full-strength tequilas(Herradura and el Jimador) as premiumization
trends continue.
Brazil, Turkey, and Chile — Strong growth forJack Daniel’s Tennessee Whiskey and flavors,
including Jack Daniel’s Tennessee Apple.
Poland — Growth led by Jack Daniel’s
Tennessee Whiskey and Finlandia Vodka.

Thomas Hinrichs,
SVP, President,
Emerging International

THE ADVANTAGES OFOWNED DISTRIBUTION
Q: How do you determine which route to consumer is best fora market?
A: We use a variety of perspectives. Beyond laws and regulations, weconsider the size of opportunity in the market — what it takes to serve
customers and compete effectively. We then consider the distribution
landscape and the capabilities and costs of different models in orderto design the model that best delivers our short- and long-term
ambitions, balancing risk and reward.
Q: What are some of the ways that Brown-Forman distributes
products to its customers?
A: There is great variation in different parts of the world. The U.S.
generally prohibits spirits and wine manufacturers from selling directly
to consumers. So, we sell our brands to distributors or state governments, which then sell at retail to customers and consumers. Outside
the U.S., we operate through owned distribution, joint ventures, andthird-party partnerships, including multicountry alliances and bothindustry and nonindustry partners. We currently own and operate
distribution companies for 14 countries, including the launch of ourowned distribution for Taiwan, Belgium, and Luxembourg this year.
Q: Can you give an example of a successful transition to
owned distribution?
A: Our recent transition in the U.K., the third largest premium+ spirits
market in the world, is a case study of what’s possible. Full control
and ownership of our route to market, including direct customer
relationships and logistics, allows better portfolio management
and an ability to develop our emerging brands, while also enablinga healthier balance of volume and value growth for longer-termvalue creation. A second example is Taiwan, where our recent
owned distribution change opened new opportunities to develop our
super-premium American whiskey and Scotch malts portfolios in
the number-six super-premium whiskey market in the world.

15

BROWN-FORMAN
2022 Integrated Annual Report

Perspective

Matias Bentel,
SVP, Chief Brands Officer

16

MEETING CONSUMERS
WHERE THEY ARE
Q: The Integrated Marketing Communications (IMC) Organization
seems like a bold idea for a company that has been around forover 150 years. How is it different from the way Brown-Forman has
approached marketing in the past?
A: The way consumers interact with brands today is increasingly
digital. To continue to grow our brands, we want to be at the forefrontof our industry when it comes to digital marketing and e-commercecapabilities. We are dedicated to advancing our capabilities acrossfive interconnected and interdependent disciplines — Media,
Performance, E-commerce, Inbound/Search, and Content. IMC
consists of 100 marketers around the world who are primarily
focused on advancing these initiatives while enabling the rest of our
450+ marketers to integrate these capabilities into all that we do. Our
vision for IMC is that we will deliver the right message, to the rightconsumer, at the right moment, in the right place, all the time. Now
we can do this at scale in a way that is both efficient and effective.
Q: How does this new organization change where you aremaking investments?
A: Beyond the five integrated disciplines that make up IMC, we areadvancing our consumer-centric philosophy, creating more agile
processes, improving our tech and data stack, and developing
the capabilities of the people on the IMC team. Half the membersof the IMC team are in newly created roles and include bothinternal talent and external hires from leading companies. We
have made significant shifts over the past three years to increase
our investment in paid media, ensuring we’re reaching as many
consumers as possible. It is paramount that we recruit and rerecruit consumers across the globe every day. By dedicating asignificant amount of our resources to reaching consumers, webuild our brands for the long term.
Q: What’s an example of how you have applied digital marketingand e-commerce capabilities for a specific brand?
A: By integrating e-commerce within IMC, we can create a truly
cohesive end-to-end consumer journey, starting from awarenessand closing the loop with sales. For example, the Jack Daniel’s Make
it Count campaign was developed with a digital-first approach. This
allows us to measure its impact, optimize in real time, and build
learnings into future communications.

INVESTING IN
BRANDS FOR TODAYAND TOMORROWThe Brown-Forman portfolio includes someof the most desirable brands in our industry.
While every one of our team members is abrand builder, our marketing organization,in particular, ensures that we continue
to steward and grow these brands forgenerations to come. To help us achieve
this objective, Brown-Forman has invested
in brand-building capabilities as we set
out to build a world-class, industry-leading
marketing organization. This work includes
five strategic priorities found on thenext page.

WORLD-CLASS CREATIVE
We continuously work to understand how our brands appeal
to diverse consumers so that we can respond with stories andmessages that are most meaningful to them. We evolved andstandardized our creative development process across theportfolio, incorporating best-in-class tools to consistently
deliver excellent creative that is distinct, memorable, and evermore relevant. In fiscal 2022, we introduced new creative acrossthe portfolio, including new work for Jack Daniel’s, Woodford
Reserve, Finlandia, and the introduction of Herradura’s firstglobal advertising campaign — Extraordinary Awaits.

INDUSTRY-LEADING
MARKETING
ORGANIZATION
It is essential for our marketing
team to represent the consumers
and the geographies that weserve. This team is becoming
increasingly diverse and global: 56%
of our marketing team members
are located outside of the U.S.,
a reflection of our continued
globalization journey. Among our
U.S.-based marketers, 45% are
women, and 19% are people of color.
We have transformed our learningand development programs witha goal of rapidly accelerating ourmarketing capabilities.

World-class creative

Industry-leading
marketingorganization

Reimagining
innovation

REIMAGINING INNOVATION
Innovation, in the form of new products, is criticalto growth within our industry. Brown-Forman iscommitted to bringing new products to the market
that meet clear consumer needs, strengthenbrand equity, and improve business performance.
We recently revised our innovation principles tofocus our resources on new products with thegreatest opportunity for widespread consumer andcommercial success, including Jack Daniel’s Bonded
Tennessee Whiskey and Triple Mash Blended Straight
Whiskey. These two expressions are wonderfulexamples of our unmatched heritage of whiskey
making and commitment to the highest standardsof craftsmanship.

Increased
media spend

INCREASEDMEDIA SPEND
To continue to drive growth, weneed to constantly reach andintroduce new consumers toour brands. In order to grow ourreach, we evolved our investment
approach to allocate considerably
more dollars toward broad-reach
media, including TV and out-ofhome, with an increased shareof spend on digital video andsocial media. In fiscal 2022, we
increased global media spend by
over 10% while also investing in
the resurgence of the on-premise,
events, and experiential marketing.
Our goal with these investments is
to increase share of voice and, inturn, drive market share gains.

Digital & e-commerce(now IMC)INTEGRATED MARKETINGCOMMUNICATIONS (IMC)
The way consumers connect and engage with brands
has evolved dramatically in a world that has become
increasingly digital. To reflect this transformation, we
evolved our marketing capabilities and organizational
structure. Brown-Forman’s IMC organization, launchedin 2021, is a team of marketers around the world focusedon driving excellence within Media, Performance,
E‑commerce, Inbound/Search, and Content.

17

ENDURING VALUES.
Bold Commitments.

BROWN-FORMAN
2022 Integrated Annual Report

Our rich history, long-term
perspective, enduring values,
strategic priorities, and core
purpose of enriching life have
served us well in generatingstrong business results,
including consistent
top-line growth.

18

LIVING A SPIRIT OF COMMITMENT
Our long-range perspective lends itself to effective stewardship of environmental,social, and governance (ESG) matters. Integrated within Brown-Forman’s strategic
priorities are our commitments related to Environmental Sustainability, Diversity &Inclusion, Community Relations, and Alcohol Responsibility.
While these are topics that have always been deeply embedded in our values
and culture, we have formally incorporated them into our corporate strategy toelevate their visibility among our stakeholders. Living a Spirit of Commitment
represents our long-held focus on ESG responsibility. We have integrated Living a
Spirit of Commitment into how we do business on a daily basis, which means being
mindful of our obligations to our colleagues, consumers, communities, and thenatural world upon which we depend. To learn more about our ESG commitments
and data, visit our website at www.brown-forman.com/commitments.

COMMITTED TO THE EARTH.
MANY SPIRITS. ONE EARTH.
COMMITTED TORESPONSIBLE DECISIONS.
PAUSE.

Caring for natural resources and theclimate is more than a business concern
for us. From the ﬁelds that grow ourgrains, agave, and grapes, to the water
we transform into our spirits, to the oakfor our barrels, we depend on the earth’s
bounty. It’s about committing to theenvironment that sustains us, caring
for the resources we share with ourcommunity, and nurturing what wehave for those who come after us.

Alcohol responsibility is where it all
starts for us, and it’s the seed fromwhich all our commitments grow andreach into the future. We believe that it
is our duty to make sure our products
are being marketed and enjoyedresponsibly by encouraging awarenessand empowering mindful choices.

PORTFOLIOLTA YEN I L ITAB

S P ALCON

OL L I TY
OH I B ISEN
SU VIR
ST ON
AI M
N

RE

INVESTMENTGEOGRAPHYRS
US I TY
IO
N

MM T
CO ELARUN
IO IT Y
NS

VE L
DI NC
I
&
PEOPLECOMMITTED TO OUR NEIGHBORS.
INVESTING IN OUR BEST SPIRIT.

COMMITTED TO PEOPLE.
MANY SPIRITS. ONE B-F.

We’re committed to doing our part in thecommunities that share the places wecall home. Whether it’s a matter ofsustainability, alcohol responsibility, orcommunity engagement, there’s a reason
we get involved — it’s important to be agood neighbor.

Our deep familial roots inspire ourcommitment to people. We believe
everyone should get what is needed
most — a sense of belonging, of being
heard, of counting. Whoever you are,wherever you are from, whomever
you love, there’s a space for you in
Brown-Forman. We want you to bea part of our story.

19

COMMITTED TO
The Earth.
Caring for natural resources and theclimate is more than a business concern forBrown-Forman. From the ﬁelds that growour grains, agave, and grapes, to the water wetransform into our spirits, to the oak for ourbarrels, we depend on the earth’s bounty. It’s
about committing to the environment thatsustains us, caring for the resources we sharewith our community, and nurturing what wehave for those who come after us.

BROWN-FORMAN
2022 Integrated Annual Report

We have practiced sustainability since long before it was known assuch. Throughout our own production operations, we have worked
to eliminate waste and improve efficiency in our use of water, fuel,and agricultural products. We’ve built partnerships with suppliers,
experts, and other beverage alcohol producers so we can learn andwork together. We recognize the risk that climate change poses toour business, our communities, and our world, and are working to
mitigate Brown-Forman’s impact.

20

Perspective

MANY SPIRITS.
ONE EARTH.
Last year, we raised our level of ambition and commitment
to the natural resources that sustain us. We continued ourwork this year, building our roadmap for action and making
progress against our new targets.

GOAL: Halve greenhouse gas(GHG) emissions by 2030
We are developing the detailed strategy that will guide ourwork to halve our emissions on an absolute basis from ourfiscal 2020 baseline. This means that we will reduce ourtotal emissions even as our business grows. Casa Herraduramade progress toward this goal with energy-efficiency
improvements across its operations, to include improving
steam-use efficiency, installing high-efficiency pumps andfans for wastewater treatment, and upgrading to LED lighting
in our bottling operations. Brown-Forman recently joined theRace to Zero with the Scotch Whisky Association, committing
to work with other member companies to ultimately achieve
net zero GHGs in our operations.
As we look forward to showing progress against our new
sustainability goals in the future, we are excited to have met
our previous 2023 GHG target two years ahead of schedule.
Absolute Change in GHG Emissions*+19.0%+14.8%
+7.1%
2017

2018

2019

-1.5%

-15%

2020

-31%

2023
GOAL

2021
*Years 2017-2019 are based on calendar year. Years 2020 and 2021 are based on
fiscal year. We achieved our 2023 GHG reduction target by retiring renewableenergy credits from our wind power PPA. At the time of publishing this report,
we have verified our 2020 fiscal year GHG emissions inventory.

Alex Alvarez,
SVP, Chief Sustainability
Officer and Director of ESG

ACTING ON OUR COMMITMENTS
Q: What is your top priority in this new role to ensure that
Brown-Forman can continue to endure for another 152 years?
A: Last year, Brown-Forman announced an ambitious set ofenvironmental commitments. Now, my task is to amplify our
ESG commitments in order to ensure continued alignment andintegration into our strategy, drive reporting progress and results,
and build additional partnerships that will help move us forward.
Strong relationships with suppliers and other stakeholders will
be an important part of how we make progress.
Q: What are the company’s strengths in terms of environmental
performance?
A: I’m proud of the work we’ve done to reduce our carbon footprint.
Between improving efficiency in our production operations, theengagement of our employees, and our renewable energy sourcing
strategy, we are in a good position to reach our emissions and energy
reduction goals. In fact, in March 2022, we began offsetting 100%of our U.S. electricity consumption with green energy sourcing. We
are also a leader in terms of our waste reduction, with manufacturing
processes that enable our production sites to be zero-waste facilities.
Q: What’s an example of the type of partnership you’re looking
to foster?
A: In Jalisco, Mexico, where the agave for our tequilas is grown,
we are working with a diverse group of stakeholders, including
members of the spirits industry, through an organization called
Charco Bendito, which translates to “holy puddle.” Over the next
several years, we will work together on water quality improvements,
reforestation, and land and biodiversity conservation in the region.
It is the first time that beverage industry leaders have worked together
on a project to test nature-based solutions to replenish an aquifer,
and I hope it’s a sign of good things to come.

21

GOAL: Use 100% renewableelectricity by 2030
In the years to come, there will be a ray of sunshine inevery bottle of Jack Daniel’s Tennessee Whiskey. In 2021,
we announced a partnership with the Tennessee Valley
Authority, Duck River Electric Membership Corporation,
and Nashville-based solar power producer Silicon Ranch toprovide 20 megawatts of solar energy that will supply 70%of the energy needed for our Jack Daniel Distillery and
Bottling operations. Brown-Forman also recently joined
RE100, uniting with hundreds of other companies incommitting to using 100% renewable electricity by 2030.
FOR FY2021,

84%

OF ELECTRICITY WAS FROMRENEWABLE SOURCES

GOAL: Achieve water balance for key
watersheds by 2030
Water is integral to all of our products. We are working
to achieve net positive water impact in our high-risk andbusiness-critical watersheds. In Sonoma County, California,
which has experienced a series of devastating droughts, weare reducing water use at the Sonoma-Cutrer vineyard by
20% across production operations, vineyards, and the winerytasting room. Improvements include engaging our teams
in water conservation efforts, investing in water recycling
systems for barrel washing, and reducing the total area oflandscaping that is being watered or maintained.

BROWN-FORMAN
2022 Integrated Annual Report

GOAL: Engage with 100% of our direct
farmers on regenerative agricultural
practices by 2025

22

Farmers grow the agave, grapes, and grains that make our
products. They are essential partners not only in producing
our spirits, but also in reducing our environmental footprint.
We are currently focused on our partnership with corn
farmers, encouraging those across our home state of
Kentucky to plant rye as a winter cover crop. This helps build
healthy soils for our corn requirements and supplies a key
ingredient for our bourbon, rye, and Tennessee whiskeys.

GOAL: Integrate circular economy
principles by 2030
We work hard to reduce, recycle, or reuse the byproducts ofour manufacturing process. As a result, more than 99% of
the waste generated by Brown-Forman’s facilities is diverted
from landfills. This includes everything from barrels that are
sold to other alcohol producers, to converting our tequila
distillation byproduct into renewable natural gas. And we arealways looking for ways to do even more. With partners inLouisville, for example, we have invested in equipment to get
more barrels out of the wood that comes into our cooperages
and convert wood chips and mulch into usable materials.
Brown-Forman is further aligning with circular economy
principles by designing barrels that prevent the loss ofwhiskey through evaporation during the maturation process(known as “the angel’s share”). We are also supporting theconstruction of a biogas facility that will provide renewableenergy for our distillery and fertilizer for local crops.

GOAL: Offer 100% recyclable/reusable
primary packaging by 2030
The most significant packaging we use — and the mostsubstantial in terms of environmental impact — are theglass bottles that hold our spirits. In fiscal 2022, BrownForman created a Packaging Council that meets regularly
to discuss ways to improve packaging sustainability andglass use. As a result of this team’s work, sustainability
considerations are now part of all packaging design briefs.
Our Travel Retail business recently demonstrated theirembrace of this commitment by setting interim goals to
remove 100% of single-use plastic from promotions by
2023 and reduce 50% of gift packaging by 2027.

DENDRIFUND:
A DECADE OF SOWING SEEDSGOAL: Source 50% of white
oak logs from sustainably
managed forests by 2035
Brown-Forman is a founding member of the White Oak
Initiative, which works to ensure the long-termsustainability of America’s white oak forests that are
required in the making of our barrels. In fiscal 2022, theWhite Oak Initiative completed an assessment andconservation plan that outlines threats to America’s
white oak forests and the steps that can be taken toprevent their decline. DendriFund is working to improveregeneration and sustainability of wood, in particular
American white oak trees, along with water and grain.
DendriFund is helping to convene and support foresters,
businesses, and policymakers, including the newly
formed Congressional White Oak Caucus, to preserve
white oak forests for the future.
Our commitment to conserving forests isn’t limited toAmerican white oak. In Ireland, our Slane Irish Whiskey
brand is working with the Slane Castle estate and theConyngham family on a sustainable forestry project.
The project will improve woodlands by removing
invasive species and planting new hedgerows to protect
surrounding barley fields and improve biodiversity at
the site.

Recognizing the importance of natural resources tothe longevity of our business, Brown-Forman and theBrown family created DendriFund in 2012 to promotesustainability in the whiskey ecosystem.
Over the past decade, DendriFund has focused on waterand grain sustainability, as well as the regeneration ofwhite oak trees used to make our barrels. These trees
improve both biodiversity and water quality. Supporting
the health of white oaks translates into supporting thehealth of an entire forest.
DendriFund co-founded the White Oak Initiative in2017. In the past year, DendriFund also partnered with
Old Forester on community outreach to develop the Old
Forester Tree Nursery at the Brown-Forman Distillery.
Volunteers planted seedlings grown from acorns that
had been gathered two years earlier and collected newacorns throughout Louisville to plant in 2023. This tree
nursery will be used for the long-term study of white
oak sustainability and improved acorn production. In
addition, DendriFund has been working with partners,
including Woodford Reserve, since 2015 to bring rye
back to Kentucky as a commercial cover crop.
DendriFund’s operating model encourages collaborationand participation in multistakeholder partnerships
related to resource regeneration. Leveraging about$1 million in seed funding over the past 10 years,
DendriFund’s model has generated millions more forprojects that the foundation has helped incubate.
Much like the acorns that will one day become mighty
oak trees, this model allows each of our partners togrow and have a greater impact than they would alone,sowing seeds of progress far and wide.

23

COMMITTED TO
People.
We believe in the value of diversity andinclusion for our colleagues, culture,
consumers, and communities.
We want to do our part to build a better future
for all, including nurturing a workplace where
everyone can bring their best self and their best
ideas forward. A diversity of experiences andbroad perspectives is essential as we increase
our brands’ relevance and appeal to diverse
consumer groups around the world.
By better understanding the evolving
environment in which we live and work, we
can realize the value of diversity for all our
stakeholders. Many Spirits, One Brown-Formanis the first edition of our 2030 diversity andinclusion (D&I) strategy. Within that strategy, weare pursuing the following ambitions:

10%

OF

U.S. CHARITABLE CONTRIBUTIONSTO ORGANIZATIONS THAT BENEFIT
DIVERSE GROUPS(Brown-Forman Foundation and Corporate)
37% as of April 30, 2022

40%

50%

WOMEN IN SENIORLEADERSHIP POSITIONSGLOBALLY BY 2030
41% as of April 30, 2022

WOMEN IN PROFESSIONAL AND
LEADER-LEVEL POSITIONSGLOBALLY BY 2030
49% as of April 30, 2022

25%

16%

PEOPLE OF COLOR IN U.S.
WORKFORCE BY 2030
20% as of April 30, 2022

SPEND WITH WOMEN- OR MINORITYOWNED BUSINESSES IN LOCATIONSWHERE DIVERSITY CATEGORIES ARE
TRACKED BY THE GOVERNMENT
14% as of April 30, 2022

BROWN-FORMAN
2022 Integrated Annual Report

A Seat at the Table for Everyone

24

In addition to the D&I strategy, the ELT is working toward a series of “Be Better, Do Better” commitments, including tying
10% of the ELT’s short-term cash incentive compensation to our D&I progress and ambitions. In fiscal 2022, we delivereda six-month immersive Inclusive Leadership Program to all executive leaders that included virtual learning days,
self-guided assignments, and learning circles designed to teach leaders how to better demonstrate curiosity, cultural
humility, and allyship. It will be extended to a wider group of leaders in fiscal 2023.
Our employee resource groups (ERGs) remain a valuable part of our culture. Brown-Forman has 10 ERGs that help
foster an inclusive culture, raise cultural awareness, and collaborate with our business and brands as we seek to meetthe diverse needs of our consumers, customers, and communities. ERGs inspire culture change, bring forward bestpractices, design and implement learning and development programs, and help us be an employer of choice.

AN AWARD-WINNING CULTURE
HOW DO WE KNOW IF OUR CULTURE IS INCLUSIVE? ONE WAY IS THROUGH ACCOLADESCONFERRED BY EXTERNAL ORGANIZATIONS. RECENT EXTERNAL AWARDS INCLUDE:

12th

2021

BEST

BEST

CONSECUTIVE YEAR
Corporate Equality Index 100% score,
Human Rights Campaign
2022

SUPER WORKSPACES
Brown-Forman Mexico

PLACE TO WORK FOR
EXECUTIVE WOMEN
Seramount

PLACE TO WORK FOR
DISABILITY INCLUSION
Disability Inclusion Index
2021

2021
50 OUT FRONT: BEST PLACES TO
WORK FOR WOMEN & DIVERSE
MANAGERS
Diversity MBA

GREAT PLACE TO WORKUK

MEXICOBRAZIL

INDIA

Great Place to Work™
and Great Place toWork for Women™

Fourthconsecutive year

Third
consecutive year

Secondconsecutive year

POLANDFRANCE

SPAIN

25

Welcome Back to Better
The people of Brown-Forman are what make our results
possible. We are committed to attracting and retaining
the most talented people to our company and building
a culture where everyone can grow and thrive. We are
grateful to all those who remained on site during the
pandemic to make, bottle, and ship our brands and are
excited to welcome back those who worked remotely.
Nearly all of our offices have fully reopened since theirclosures in March 2020, and we have invested in better
technology and better collaboration experiences tokeep our teams engaged, productive, and connected.
As we welcome people back to our offices and home
places, we continue to reinforce what makes ourculture special.
Brown-Forman’s ability to thrive for more than
150 years is proof of our special culture and theemotional connection built and sustained among ourteam members over decades. Our average tenure in the
U.S. is 11 years, a figure that has held steady since 2017and is twice the average tenure for the manufacturingsector overall. Metrics in other parts of the world show
a similar trend. Our people have been the source of our
success, and we continue to make investments in people
development, health, and well-being. We significantly
expanded our employee assistance program during the
pandemic and increased access to resources to support
mental health. Our people grew their careers andcapabilities by logging nearly 56,000 hours of learning
activities on leadership, inclusion, brand education,compliance, and financial acumen.

Creating Opportunities Across
Our Industry
An important priority for Brown-Forman is empoweringand highlighting the accomplishments of people whohave historically been underrepresented in the spirits
industry. For Women’s History month, we created the“Women of Grapes and Grains” promotion in which wehighlighted trailblazers who are making a difference inBrown-Forman’s brands. The promotion recognized these
women and their contributions to the industry, as well
as speaking to consumers who saw products that are
welcoming to all. They include distillers, master tasters,
blenders, and winemakers who came together to share
their perspectives as women in the industry, focusing on
their career paths as well as their collective interest inenvironmental sustainability.
We continued to celebrate the relationship between
Jack Daniel and his mentor, Nathan “Nearest” Green, byrenaming Barrel House 114 at the Jack Daniel Distillery
the George Green Barrel House. The name honors Nearest
Green’s son, George, and the extended Green family.
At least three of Nearest’s sons and four of his
grandchildren worked at the Jack Daniel distillery during
Nearest’s lifetime. In all, seven generations of Nearest
Green’s descendants have worked at the distillery, withthree direct descendants continuing to work there today.
In 2020, Jack Daniel’s and the Nearest Green Distillery,maker of Uncle Nearest Premium Whiskey, announced the
Nearest & Jack Advancement Initiative to further diversity

BROWN-FORMAN
BROWN-FORMAN
2022
2022
Integrated
Integrated
AnnualAnnualReportReportU.S. WORKFORCE DEMOGRAPHICS*

26

FEMALE

MALE

WHITE

BLACK ORAFRICANAMERICANHISPANIC
OR LATINO

ASIAN

OTHER

BOARD

27%

73%

91%

9%

—

—

—

EXECUTIVE LEADER

34%

66%

79%

10%

6%

5%

—

BUSINESS LEADER

47%

53%

80%

9%

8%

3%

—

LEADER

47%

53%

83%

7%

5%

2%

3%

PROFESSIONAL

64%

36%

78%

10%

6%

3%

3%

PRODUCTION

18%

82%

78%

15%

5%

—

2%

TEMPORARY/SEASONAL

70%

30%

74%

10%

10%

3%

4%

*Diversity data of all employees working in the U.S. as of April 30, 2022. Ethnicity data is based on self-disclosed employee information. Board data includes all Directors (U.S. and international).
Numbers may not add to 100% due to rounding. Other includes 2+ races, Native American, Alaskan Indian, or categories left blank.

within the spirits industry. A combined pledge
of $5 million helped create the Nearest Green
School of Distilling, develop the Leadership
Acceleration Program, and establish theBusiness Incubation Program.

Another pillar in the Nearest and Jack
Advancement Initiative is the Leadership
Acceleration Program. The program isdesigned to fast-track the development of
BIPOC candidates for future master distillers,
distillery managers, and other senior
management positions within the American
whiskey industry. The first selections in the
program, Tracie Franklin and Byron Copeland,
are both on track to graduate in summer 2022.

Crystal Peterson,
VP, Chief Diversity Officer

Perspective

We also honored Nearest’s legacy by celebrating
Du Nord Social Spirits as the first graduate of
the Nearest and Jack Advancement Initiative
Business Incubation Program. This program
offers mentorship to BIPOC (Black, Indigenous,
and people of color) entrepreneurs in all areasof the distilling business, including access tomarketing, branding, expanded distribution
networks, and other assets and opportunities for
growth. Du Nord increased its sales footprint andis now available in 10 states across the country.

CREATING AN INCLUSIVE CULTURE
Q: “Bold spirits” has been used to describe Brown-Forman brands,
and also its people. What is unique about Brown-Forman’s culturethat allows its people to be bold?
A: Our people strategy is centered on one core belief: in order togrow our brands and our business, we must recruit and grow great
talent. Within our 2030 D&I strategy, our mission states that wewill create an inclusive culture so that we can each bring our best
self to work. When we each have that sense of belonging, it enables
us to do our best work, to bring our bold perspectives and ideas tothe table, and ultimately leads to greater innovation, creativity, andbetter business decisions.
Q: How does Brown-Forman ensure that D&I efforts are embedded
throughout your business?
A: Our D&I efforts have four pillars: Workforce/Workplace, Brands/
Markets, Suppliers/Partners, and our Community. We recognize thatto have an impact, we cannot focus on one aspect alone. We must
make strides in all four, from ensuring we have a diverse workforce andinclusive workplace, to better understanding and serving our diverse
consumers and the markets in which we do business. For instance,in our approach to brand communications, we’re making progress inseveral areas, including adopting guidelines to eliminate bias in thecreative process, testing for cultural fluency, working to increase
diverse representation in our advertising, and tracking our mediadelivery to female and underrepresented audiences in the U.S. The
commitments made by the Brands Leadership Team is a great exampleof the work being done to embed D&I into our day-to-day work.

Descendents of Nearest Green
Working at Jack Daniel Distillery Today:
Jerome Vance, Debbie Staples, Jackie Hardin

Q: Diversity takes many forms. How do you ensure that everyone
feels included?
A: We continue to focus on the employee experience and creating
an environment and culture where each individual feels truly valued,
respected, and supported. Our 10 ERGs continue to create spaces forcolleagues to learn, explore, educate, and build awareness. Recently,
we developed a completely customized inclusive leadership program,
Lead Better: Inclusive Leadership @ B-F. The program was designed
to enable leaders to launch, accelerate, or deepen their commitment
to D&I; do the work to be better leaders; and move from unconscious
bias to conscious inclusion. All our executive leaders completed theprogram in November 2021, and we are continuing to cascade theprogram through the levels of leadership over the next two years.

27

LEADING IN ETHICAL CONDUCTIn 2022, Brown-Forman was recognized as one of the World’s Most Ethical Companies
by Ethisphere, a global leader in defining and advancing the standards of ethicalbusiness practices. To earn this distinction, Brown-Forman was evaluated on morethan 200 dimensions of culture, environmental and social practices, ethics andcompliance activities, governance, diversity, and initiatives to support a sustainablevalue chain. We believe this recognition was made possible, in part, by Brown-Forman’scompliance program, a global initiative that is underpinned by the following elements:

Risk Assessment

Education and Communication

Brown-Forman assesses risk against a range ofcompliance criteria, including alcohol responsibility,
anti-corruption, environmental, human rights,
cybersecurity, and data privacy. We adjust our complianceprogram as our business and risk profiles evolve.

During Compliance Month, all employees complete
Code of Conduct training and supplemental training
depending on the employee’s management level and/or responsibilities. We track training completions and,for some courses, level of comprehension. Monthly
compliance communications are shared with businessleaders and cascaded through the organization byCompliance Champions. Brown-Forman’s employee
intranet includes links to policies, training, escalation
channels, and ways to recognize employees for living
our values.

Governance
The Ethics and Compliance Committee oversees
Brown-Forman’s compliance program. The
Committee is chartered, chaired by the company’s
Chief Risk, Ethics, and Compliance Officer, andmeets three times per year. The Officer submits
quarterly written reports to the Audit Committee
and presents at least twice annually.

Code of Conduct
Brown-Forman’s Code of Conduct connects our corevalues to the work we do in 19 risk areas. Each risk
area details expectations for employees and includes
links to relevant policies and procedures, training, andsupporting materials. The Code of Conduct is available
in 14 languages and is updated annually.

Escalation and Investigation
Brown-Forman maintains multiple channels for
employees and non-employees to report alleged
misconduct to managers, senior leaders, oranonymously. Reports can be made via email or atoll-free hotline accessible from 44 countries. All
escalations are logged and, to the extent possible,
investigated. Brown-Forman prohibits retaliation
against anyone who makes a good faith report orassists an investigation into alleged misconduct.

Monitoring and Measurement

BROWN-FORMAN
2022 Integrated Annual Report

Third-Party Management28

We communicate compliance expectations to ourbusiness partners via the Brown-Forman Supplier
Code of Conduct, which includes escalation
instructions and a nonretaliation pledge. Partners
are subject to risk-based due diligence for anticorruption and other compliance-related risks and,in certain circumstances, are subject to training.

We continually monitor and measure our complianceprogram’s effectiveness, as well as our organization’s
awareness of and engagement with the program.
We rely on data from internal and external surveys
that help us assess our compliance-related risks. We
benchmark our program against external frameworks
and engage independent advisors to conduct specificrisk assessments.

Perspective
Human Rights
As a signatory to the United Nations Global
Compact, Brown-Forman is committed tooperating in ways that are consistent with
fundamental responsibilities regarding humanrights. Fiscal 2022 marked the launch of ourthree-year human rights strategy to review
and improve existing company commitments,
policies, processes, and practices. To date, wehave completed a human rights risk assessmentof global spend; formed a Human Rights
Steering Committee chaired by our Chief Risk,
Ethics, and Compliance Officer; updated our
Global Human Rights Policy and Supplier Codeof Conduct; and offered internal training todrive employee awareness of our commitment
to human rights.

Sailaja Kotra-Turner,
Chief Information
Security Officer

ADVANCING OUR TECHNOLOGYINFRASTRUCTURE

Health and Safety

Q: You were recently named Brown-Forman’s first Chief Information
Security Officer. What perspectives do you bring to the company?
A: Over the course of my 20-year career, I have managed teamsof IT professionals in operations, enterprise applications, andmanufacturing. In the past few years, my leadership has centeredaround IT security teams in the areas of security engineering,
operations and strategy, security awareness, and identity
management. These varied experiences allow me to help improve
Brown-Forman’s security posture through a risk-based approach.

Whether our employees are hand-raising barrels
in our cooperages, working in our distilleries,
leading tours, conducting sales, or in an office,their safety is a top priority. The risks our
employees face are in line with those of mostproduction or corporate environments, andhealth and safety teams are in place at our
locations to mitigate and reduce those risks that
could lead to injury.
Total Recordable Injury Rate (TRIR):Per 100 Full-Time Employees

 TRIR  Fatalities
3.6
2.8

2.8

2.7

2.3

0

0

0

0

0

2017

2018

2019

2020

2021

Recordable injuries, including any work-related accident involving global
production and Louisville corporate employees, have decreased over the past
four years as a result of capital investments and continuous improvement toaddress specific injuries and illnesses. We have experienced no work-related
fatalities globally over this time.

Q: The IT team structure is based on a Plan, Build, Run model. What
does that mean?
A: Plan, Build, Run is a process-centric model that divides IT into
three areas based on workstreams, rather than the more traditional
functional/technological silo approach. The “Plan” team focuses onplanning activities like design and strategy, enterprise architecture,etc. The “Build” team focuses on project management andimplementation of these solutions. In our case, given the number andexpertise of our people, we have one combined team for both “Plan”
and “Build” activities. The “Run” unit focuses on maintenance andsupport initiatives, allowing for a better end-user experience.
Q: What are your main areas of focus in the first few months in your role?
A: Our primary focus is to build and support a highly available andsecure IT infrastructure, and to continue to improve our end-user
experience. We have some initiatives in the pipeline that will help with
this, but we will also be working on breaking down silos acrosstechnology, functional, and geographic domains, including ourcorporate teams, brand teams, global offices, or production sites.
Our goal is to respond quickly and efficiently to internal businessneeds, as well as internal and external risks.

29

COMMITTED TO
Our Neighbors.
We’re committed to doing our part in the communities that we callhome. As a longtime member of these communities, we understand theimportance of being a good neighbor.
Contributions to charitable organizations are made byboth the corporation and the Brown-Forman Foundation,
which was established in 2018 to further expand upon thecompany’s legacy of strategic, charitable missions andphilanthropic endeavors. Our long history and deep rootsin Louisville make our hometown city the focus of our efforts.
In 2022, the Brown-Forman Foundation made its
largest investment in its history, a 10-year, $50 million
commitment to five organizations in west Louisville,
including AMPED, Louisville Central Community Center, theLouisville Urban League, Simmons College of Kentucky,
and the West End School. Together, these organizations
will advance educational opportunities in west Louisville,
from early childhood through adult learning.

Giving by Focus Area
(Brown-Forman Foundation and Corporate)

Arts and
Cultural Living

21%

19%

We encourage all team members to be active in theircommunities through volunteering and nonprofit board
service. In fiscal 2022, 1,200 employees volunteered
15,000 hours of their time, and 128 employees served on
230 nonprofit boards in the U.S. Together, these efforts
support our vision to deliver transformative community
impact as a best-in-class philanthropic leader.
Brown-Forman has recently provided support torefugees fleeing Ukraine through company and employee
donations totaling $500,000 to three organizations
aiding Ukrainian children and all refugees and offering
medical assistance. Brown-Forman also provided funding
to help our Ukraine-based employees evacuate. There havebeen many stories of compassion and care by employees
assisting with transportation or providing shelter to thosein need of assistance.

60%

BROWN-FORMAN
2022 Integrated Annual Report

Essential Living
Standards

Responsible andSustainable Living

Since fiscal 2020, Brown-Forman contributions outsideof Louisville have increased by 20%. We empower teammembers in 35 regional offices and production facilities
located around the world to identify priorities andopportunities for investment specific to their communities.

30

Brown-Forman Foundation announces long-term commitments.

COMMITTED TO
Responsible
Decisions.
Our brands enrich the experience of life through their histories,
quality, and ability to bring people together. Because we honorthat legacy, alcohol responsibility is woven through who we are at
Brown-Forman. We work in partnership, and on our own, to ensure
our products are marketed responsibly and enjoyed respectfully.
Our mission for alcohol responsibility is to empower
mindful choices around beverage alcohol, and ourpriorities include:Preventing drunk driving
Preventing underage access and consumption
Respecting the choice not to drink
Promoting moderation
Empowering bystander intervention
Supporting addiction recovery
Pause is Brown-Forman’s campaign to encourage
mindful choices. The campaign began by raisingawareness and inspiring action from our colleagues
and business partners around the importance ofalcohol responsibility.
For example, our SPIRIT ERG supports Brown-Forman’scommitment to create an environment where all of
us feel welcome as contributing members of theorganization, regardless of whether we choose todrink beverage alcohol. The ERG has further educatedus on inclusive event planning and raised awarenessaround addiction recovery. Brown-Forman has had asix-year partnership with the New Hampshire Liquor
Commission, Horizon Beverages, and the Mocktail
Project to present New Hampshire Mocktail Monthto provide alcohol-free online recipes for at-home
mixologists and engage with 30 bars and restaurants
to add alcohol-free options to their menus.

We join with other leading global beer, wine, andspirits producers as members and contributors to theInternational Alliance for Responsible Drinking, which
actively supports international goals to reduce harmful
consumption. We are committed to advertising ourbrands to those who are legally able to consume them.
In buying our media, we comply with the applicable
responsible marketing codes, including our own,that set minimum age demographics for such media
purchases. As we comply with these guidelines, thetotal impressions generated by our media purchases
consistently exceed 80% of those impressions being
seen by consumers who are of legal drinking age andhigher, which is above the Distilled Spirits Council of theUnited States Industry standard of 71.6%.
This critical work also involves partnerships withorganizations in Louisville that offer hope and recovery
for those experiencing addiction, including Volunteersof America and The Healing Place. We continue topartner with, and amplify, Ben’s Friends, a national
support group for food and beverage professionals
who struggle with addiction and substance abuse. In
addition, we’ve partnered with The Safe Bar Network
and Safe Bars to provide bartenders and servers withtools and skills to prevent power-based personal
violence within bars, restaurants, and other venues
where alcohol is served. These skills create safer
experiences for our trade partners and our consumers
to ensure everyone has a positive experience withour brands.
31

SELECTED FINANCIAL DATAFor Year ended April 30:

2018

2019

2020

20211

2022

SALES

$ 4,201$ 4,276$ 4,306$ 4,526$ 5,081

EXCISE TAXES

$

$

$

943

$ 1,065$

NET SALES$ 3,248$ 3,324$ 3,363$ 3,461$ 3,933

GROSS PROFIT$ 2,202$ 2,166$ 2,127$ 2,094$ 2,391

OPERATING INCOME$ 1,048

$

1,144

$

1,091

$

1,166

$ 1,204

NET INCOME

$

$

835

$

827

$

903

$

(Dollars in millions, except per share amounts)

953

717

952

1,148

838

WEIGHTED AVERAGE SHARES (IN MILLIONS) USED TO
CALCULATE EARNINGS PER SHARE— Basic

480.3

479.0

477.8

478.5

478.9

— Diluted

484.2

482.1

480.4

480.7

480.6

EARNINGS PER SHARE FROM CONTINUING OPERATIONS— Basic

$

1.49

$

1.74

$

1.73

$

1.89

$

1.75

— Diluted

$

1.48

$

1.73

$

1.72

$

1.88

$

1.74

GROSS MARGIN

67.8%

65.2%

63.2%

60.5%

60.8%

OPERATING MARGIN

32.3%

34.4%

32.4%

33.7%

30.6%

EFFECTIVE TAX RATE

26.6%

19.8%

18.0%

16.5%

24.7%

AVERAGE INVESTED CAPITAL2$ 3,832
20.0%

RETURN ON AVERAGE INVESTED CAPITAL2
CASH PROVIDED BY OPERATIONS$CASH DIVIDENDS DECLARED PER COMMON SHARE3$ 1.6080

DIVIDEND PAYOUT RATIO3,4$ 4,125653

107.8%$ 4,387

22.0%
$

800

$0.6480
37.2%$ 4,966

20.4%
$

724

$ 0.6806
39.3%$ 5,074
17.7%

19.6%
$

817

$ 0.7076
37.5%

$

936

$ 1.7360
99.2%

as of April 30:
TOTAL ASSETS$ 4,976$ 5,139$ 5,766$ 6,522$ 6,373

LONG-TERM DEBT

$ 2,341$ 2,290$ 2,269$ 2,354$ 2,019

TOTAL DEBT

$ 2,556$ 2,440$ 2,602$ 2,559$ 2,269

1 Results for fiscal 2021 include a pre-tax gain on sale of $127 million from the divestiture of Early Times, Canadian Mist, and Collingwood and related assets.
2 See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Presentation Basis — Non-GAAP Financial Measures” for details on our use of “return on
average invested capital,” including how we calculate this measure and why we think this information is useful to readers.

BROWN-FORMAN
2022 Integrated Annual Report

3 Cash dividends declared per common share and the dividend payout ratio include special cash dividends of $1.00 in both fiscal 2018 and fiscal 2022.

32

4 We define dividend payout ratio as cash dividends divided by net income.

To learn more about our ESG commitments and data, visit our website at www.brown-forman.com/commitments.

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K(Mark One)☑

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2022☐

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromtoCommission File Number 001-00123

BROWN-FORMAN CORPORATION(Exact name of registrant as specified in its charter)
Delaware(State or other jurisdiction of incorporation or organization)
850 Dixie Highway
Louisville, Kentucky(Address of principal executive offices)

61-0143150(IRS Employer Identification No.)
40210
(Zip Code)Registrant’s telephone number, including area code (502) 585-1100
Securities registered pursuant to Section 12(b) of the Act:
Title of each classClass A Common Stock (voting), $0.15 par value
Class B Common Stock (nonvoting), $0.15 par value
1.200% Notes due 2026
2.600% Notes due 2028

Trading
Symbol(s)
BFA
BFB
BF26
BF28

Name of each exchange on which registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☑
Yes ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

No ☐
No ☑

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 forsuch 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 ☑ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐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 thedefinitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report. ☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐No ☑

The aggregate market value, as of the last business day of the most recently completed second fiscal quarter, of the voting and nonvoting equity held by nonaffiliates of the registrant wasapproximately $23,100,000,000.
The number of shares outstanding for each of the registrant’s classes of Common Stock on May 31, 2022, was:Class A Common Stock (voting), $0.15 par value
Class B Common Stock (nonvoting), $0.15 par value

169,175,352
309,878,389

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement of Registrant for use in connection with the Annual Meeting of Stockholders to be held July 28, 2022, are incorporated by reference into Part III of this report.

Table of Contents
PART I
Item 1.
Business
Item 1A.
Risk Factors
Unresolved Staff Comments
Item 1B.
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4.
Mine Safety Disclosures
PART II
Item 5.
Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
Item 6.
[Reserved]
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
Item 8.
Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A.
Controls and Procedures
Other Information
Item 9B.
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10.
Directors, Executive Officers, and Corporate GovernanceItem 11.
Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Item 14.
PART IV
Item 15.
Exhibits and Financial Statements Schedules
Form 10-K Summary
Item 16.
SIGNATURESSCHEDULE II – Valuation and Qualifying Accounts

2

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4
16
26
27
28
28
29
29
30
48
49
83
83
83
83
83
83
84
84
84
84
87
88
91

Forward-Looking Statement Information. Certain matters discussed in this report, including the information presented in Part II under “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contain statements, estimates, and projections that are “forwardlooking 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 updateor 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 orfrom our current expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part I under “Item 1A. Risk
Factors” and those described from time to time in our future reports filed with the Securities and Exchange Commission, including:
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•

•
•
•
•
•
•
•
•
•
•

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 ourgeographic markets or distribution networks
Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher fixed costs
Disruption of our distribution network or inventory fluctuations in our products by distributors, wholesalers, or retailers
Changes in consumer preferences, consumption, or purchase patterns – particularly away from larger producers in favor of small distilleries or local
producers, or away from brown spirits, our premium products, or spirits generally, and our ability to anticipate or react to them; further legalization of
marijuana; shifts in consumer purchase practices; bar, restaurant, travel, or other on-premise declines; shifts in demographic or health and wellness trends;
or unfavorable consumer reaction to new products, line extensions, package changes, product reformulations, or other product innovation
Production facility, aging warehouse, or supply chain disruption
Imprecision in supply/demand forecasting
Higher costs, lower quality, or unavailability of energy, water, raw materials, product ingredients, or labor
Impact of health epidemics and pandemics, including the COVID-19 pandemic, and the risk of the resulting negative economic impacts and related
governmental actions
Unfavorable global or regional economic conditions, particularly related to the COVID-19 pandemic, and related economic slowdowns or recessions, lowconsumer 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 andconditions; protectionist trade policies, or economic or trade sanctions, including additional retaliatory tariffs on American whiskeys and the effectivenessof 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 inrelated 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 structure3

Use of Non-GAAP Financial Information. Certain matters discussed in this report, including the information presented in Part II under “Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations,” include measures that are not measures of financial performance
under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures should not be considered in isolation or as a substitute for any
measure derived in accordance with GAAP, and also may be inconsistent with similarly titled measures presented by other companies. In Part II under “Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations,” we present the reasons we use these measures under the heading“Non-GAAP Financial Measures,” and we reconcile these measures to the most closely comparable GAAP measures under the heading “Results ofOperations.”
PART I
Item 1. Business
Overview
Brown-Forman Corporation (the “Company,” “Brown-Forman,” “we,” “us,” or “our” below) was incorporated under the laws of the State of Delaware in
1933, successor to a business founded in 1870 as a partnership and later incorporated under the laws of the Commonwealth of Kentucky in 1901. We primarily
manufacture, distill, bottle, import, export, market, and sell a wide variety of beverage alcohol products under recognized brands. We employ approximately
5,200 people (excluding individuals that work on a part-time or temporary basis) on six continents, including approximately 2,600 people in the United States(approximately 15% of whom are represented by a union) and 1,200 people in Louisville, Kentucky, USA, home of our world headquarters. According toInternational Wine & Spirit Research (IWSR), we are the largest American-owned spirits and wine company with global reach. We are a “controlled company”
under New York Stock Exchange rules because the Brown family owns more than 50% of our voting stock. Taking into account ownership of shares of our
non-voting stock, the Brown family also controls more than 50% of the economic ownership in Brown-Forman.
For a discussion of recent developments, see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations –Executive Summary.”

4Brands
Beginning in 1870 with Old Forester Kentucky Straight Bourbon Whisky – our founding brand – and spanning the generations since, we have built a
portfolio of more than 40 spirit, ready-to-drink (RTD) cocktail, and wine brands that includes some of the best-known and most loved trademarks in our
industry. The most important and iconic brand in our portfolio is Jack Daniel’s Tennessee Whiskey, the #1 selling American whiskey in the world1. Jack
Daniel’s Tennessee Whiskey was recently named the most valuable spirits brand in the world in the 2021 Interbrand “Best Global Brands” rankings. Our
premium bourbons, Woodford Reserve and Old Forester, were once again selected for the Impact “Hot Brands”2 list, marking nine and four consecutive years
on the list, respectively. Our tequilas, el Jimador and Herradura, were also named to the “Hot Brands”2 list.

Jack Daniel's Tennessee Whiskey
Jack Daniel's RTD3
Jack Daniel's Tennessee Honey
Gentleman Jack Rare Tennessee Whiskey
Jack Daniel's Tennessee FireJack Daniel's Tennessee AppleJack Daniel's Single Barrel Collection4
Jack Daniel's Tennessee Rye
Jack Daniel's Winter Jack
Jack Daniel's Sinatra SelectJack Daniel’s Bonded
Jack Daniel's No. 27 Gold Tennessee Whiskey
Jack Daniel's Bottled-in-Bond
Jack Daniel’s 10 Year Old
Jack Daniel’s Triple Mash
Woodford Reserve Kentucky Bourbon
Woodford Reserve Double Oaked
Woodford Reserve Kentucky Rye Whiskey
Woodford Reserve Kentucky Straight Malt Whiskey
Woodford Reserve Kentucky Straight Wheat Whiskey
1
2

Principal Brands
el Jimador Tequilas5
el Jimador New Mix RTD
Korbel California Champagnes6
Korbel California Brandy6
Herradura Tequilas7
Finlandia Vodkas
Sonoma-Cutrer California Wines
Old Forester Kentucky Straight Bourbon Whisky
Old Forester Whiskey Row Series
Old Forester Kentucky Straight Rye Whisky
GlenDronach Single Malt Scotch Whisky
Benriach Single Malt Scotch Whisky
Glenglassaugh Single Malt Scotch Whisky
Chambord Liqueur
Slane Irish Whiskey
Fords Gin
Coopers' Craft Kentucky Bourbon
Part Time Rangers RTDs

IWSR, 2022.
Impact Databank, March 2022.

Jack Daniel's RTD includes Jack Daniel's & Cola, Jack Daniel's Country Cocktails, Jack Daniel's Double Jack, and other malt- andspirit-based Jack Daniel’s RTDs.
4
The Jack Daniel's Single Barrel Collection includes Jack Daniel's Single Barrel Select, Jack Daniel's Single Barrel Barrel Proof, Jack
Daniel's Single Barrel Rye, and Jack Daniel's Single Barrel 100 Proof.
5
el Jimador Tequilas comprise all full-strength expressions of el Jimador.
6
Korbel is not an owned brand. We sell Korbel products under contract in the United States and other select markets.
7
Herradura Tequilas comprise all expressions of Herradura.
3

See “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2022 Brand
Highlights” for brand performance details.
Our vision in marketing is to be the best brand-builder in the industry. We build our brands by investing in platforms that we believe create enduring
connections with our consumers. These platforms cover a wide spectrum of activities, including media advertising (TV, radio, print, outdoor, digital, andsocial), consumer and trade promotions, sponsorships, and visitors' center programs at our distilleries and our winery. We expect to grow our sales and profits
by consistently delivering creative, responsible marketing programs that drive brand recognition, brand trial, brand loyalty, and ultimately, consumer demandaround the world.

5Markets
We sell our products in over 170 countries around the world. The United States, our most important market, accounted for 49% of our net sales in fiscal
2022 and the other 51% were outside of the United States. The table below shows the percentage of total net sales for our largest markets in our three mostrecent fiscal years:

United States
Germany
Australia
United Kingdom
MexicoOther
TOTAL

Percentage of Total Net Sales by Geographic Area
Year ended April 30
2020
2021
50 %
50 %
5%
6%
5%
6%
5%
6%
5%
4%
30 %
28 %
100 %
100 %

2022
49 %
6%
6%
6%
5%
28 %
100 %

Note: Totals may differ due to rounding

For details about net sales in our largest markets, see “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations –Results of Operations – Fiscal 2022 Market Highlights.” For details about our reportable segment and for additional geographic information about net sales andlong-lived assets, see Note 17 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.” For details on risks related
to our global operations, see “Item 1A. Risk Factors.”
Distribution Network and Customers
Our distribution network, or our “route to consumer” (RTC), varies depending on (a) the laws and regulatory framework for trade in beverage alcohol bymarket, (b) our assessment of a market's long-term attractiveness and competitive dynamics, (c) the relative profitability of distribution options available to us,(d) the structure of the retail and wholesale trade in a market, and (e) our portfolio's development stage in a market. As these factors change, we evaluate our
RTC strategy and, from time to time, adapt our model.
In the United States, which generally prohibits spirits and wine manufacturers from selling their products directly to consumers, we sell our brands either
to distributors or to state governments (in states that directly control alcohol sales) that then sell to retail customers and consumers.
Outside the United States, we use a variety of RTC models, which can be grouped into three categories: owned distribution, partner, and governmentcontrolled markets. We own and operate distribution companies for Australia, Belgium and Luxembourg, Brazil, Czechia, France, Germany, Korea, Mexico,
Poland, Spain, Taiwan, Thailand, Turkey, and the United Kingdom. In these owned-distribution markets, and in a large portion of the Travel Retail channel, wesell our products directly to retailers or wholesalers. In many other markets, including Italy, Japan, and South Africa, we rely on third parties to distribute ourbrands, generally under fixed-term distribution contracts. In Canada, we sell our products to provincial governments.
We believe that our customer relationships are good and our exposure to concentrations of credit risk is limited due to the diverse geographic areas
covered by our operations and our thorough evaluation of each customer. In fiscal 2022, our two largest customers accounted for approximately 14% and 12%of consolidated net sales, respectively. No other customer accounted for 10% or more of our consolidated net sales in fiscal 2022.
Seasonality
Holiday buying makes the fourth calendar quarter the peak season for our business. Approximately 30% of our reported net sales for fiscal 2020, fiscal
2021, and fiscal 2022 were in the fourth calendar quarter of each year.

6Competition
Trade information indicates that we are one of the largest global suppliers of premium spirits. According to IWSR, for calendar year 2021, the ten largest
global spirits companies controlled approximately 20% of the total spirits volume sold around the world. While we believe that the overall market environment
offers considerable growth opportunities for us, our industry is, and will remain, highly competitive. We compete against many global, regional, and local
brands in a variety of categories of beverage alcohol, but our brands compete primarily in the industry's premium-and-above price points. Our competitors
include major global spirits and wine companies, such as Bacardi Limited, Beam Suntory Inc., Becle S.A.B. de C.V., Davide Campari-Milano N.V., Diageo
PLC, LVMH Moët Hennessy Louis Vuitton SE, Pernod Ricard SA, and Rémy Cointreau. In addition, particularly in the United States, we compete withnational companies and craft spirit brands, many of which entered the market in the last few years.
Brand recognition, brand provenance, quality of product and packaging, availability, flavor profile, and price affect consumers' choices among competingbrands in our industry. Other factors also influence consumers, including advertising, promotions, merchandising at the point of sale, expert or celebrity
endorsement, social media and word of mouth, and the timing and relevance of new product introductions. Although some competitors have substantiallygreater resources than we do, we believe that our competitive position is strong, particularly as it relates to brand awareness, quality, availability, and relevanceof new product introductions.
Ingredients and Other Supplies
The principal raw materials used in manufacturing and packaging our distilled spirits, liqueurs, RTD products, and wines are shown in the table below.
Principal Raw Materials
Distilled Spirits
Liqueurs
RTD Products
Wines
Packaging
Agave
Flavorings
Flavorings
Grapes
Aluminum cansBarleyNeutral spirits
Malt
Wood
Cartons
Corn
Sugar
Neutral spirits
Closures
Malted barley
Water
Sugar
Glass bottles
Rye
Whiskey
TequilaLabels
Sugar
Wine
Water
PET1 bottles
Water
Whiskey
Wood
1

Polyethylene terephthalate (PET) is a polymer used in non-glass containers.

We are currently managing through a variety of global supply chain disruptions, largely related to glass supply, and have deployed a number of risk
mitigation strategies to address the various constraints on our business. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” for more information on the effect of supply chain disruptions on our results.
From time to time, our agricultural ingredients (agave, barley, corn, grapes, malted barley, rye, and wood) could be adversely affected by weather andother forces out of our control that might constrain supply or reduce our inventory below desired levels for optimum production.
Whiskeys and certain tequilas and other distilled spirits must be aged. Because we must produce these distilled spirits years in advance to meet projected
future demand, our inventories of these products may be larger in relation to sales and total assets than in many other businesses.
For details on risks related to the unavailability of raw materials and the inherent uncertainty in forecasting supply and demand, see “Item 1A. Risk
Factors.”
Intellectual Property
Our intellectual property includes trademarks, copyrights, proprietary packaging and trade dress, proprietary manufacturing technologies, know-how, andpatents. Our intellectual property, especially our trademarks, is essential to our business. We register our trademarks broadly around the world, focusing
primarily on where we sell or expect to sell our products. We protect our intellectual property rights vigorously but fairly. We have licensed some of ourtrademarks to third parties for use with services or on products other than alcoholic beverages, which enhances the awareness and protection of our brands.
Depending on the jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly maintained. We also have various licenses
and distribution agreements for the production, sale, and marketing of our products,

7

and for the sale and marketing of products of others. These licenses and distribution agreements have varying terms and durations.
For details on risks related to the protection of our intellectual property, see “Item 1A. Risk Factors.” For details on our most important brands, see “Item7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2022 Brand Highlights.”
Regulatory Environment
Federal, state, local, and foreign authorities regulate how we produce, store, transport, distribute, market, and sell our products. Some countries and local
jurisdictions prohibit or restrict the marketing or sale of distilled spirits in whole or in part.
In the United States, at the federal level, the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department of the Treasury regulates the spirits andwine industry with respect to the production, blending, bottling, labeling, advertising, sales, and transportation of beverage alcohol. Similar regulatory regimes
exist at the state level and in most non-U.S. jurisdictions where we sell our products. In addition, beverage alcohol products are subject to customs duties,
excise taxes, and/or sales taxes in many countries, including taxation at the federal, state, and local level in the United States.
Many countries set their own distilling and maturation requirements; for example, under U.S. federal and state regulations, bourbon and Tennessee
whiskeys must be aged in new, charred oak barrels; we typically age our whiskeys at least three years. Mexican authorities regulate the production and bottlingof tequilas; they mandate minimum aging periods for extra añejo (three years), añejo (one year), and reposado (two months). Irish whiskey must be matured atleast three years in a wood cask, such as oak, on the island of Ireland. Scotch whisky must be matured in oak casks for at least three years in Scotland. We
comply with all of the applicable laws and regulations.
Our operations are subject to various environmental protection statutes and regulations, and our policy is to comply with them.

8Integrated Strategy and Performance

For more than 150 years, Brown-Forman and the Brown family have been committed to driving sustainable growth and preserving Brown-Forman as a
thriving, family-controlled, independent company. The image on the left illustrates our core purpose, “Enriching Life,” and our highest ambition, “Nothing
Better in the Market,” surrounded by the values that have guided us for decades: integrity, respect, trust, teamwork, and excellence. In addition to these guiding
principles, our success depends on several strategic priorities, as illustrated in the image on the right: the quality of our brands within our portfolio, ourgeographic reach, the talent and diversity of our people, and the return on our investments. Moreover, taking an integrated approach means that many aspectsof our company contribute to this value creation and are fundamental to our strategy, including our commitment to environmental sustainability, alcohol andmarketing responsibility, diversity and inclusion, and to building communities in which we live and work.
We faced a challenging and volatile environment, including supply chain disruptions and the ongoing pandemic, over the past two fiscal years. Our
employees' unique mix of agility, resilience, energy, and collaboration enabled us to succeed despite these challenges, and we believe will continue tostrengthen us over time. Our values drove decisions throughout this year, and our core purpose of “Enriching Life” and our highest ambition of “Nothing Betterin the Market” continue to guide us as we move forward to a reimagined future with a renewed sense of opportunity for what lies ahead. We believe thatseveral recent headwinds are becoming tailwinds. For example, after more than three years, tariffs on American whiskey in the European Union were removed
on January 1, 2022, and tariffs in the United Kingdom were removed on June 1, 2022.
This Integrated Annual Report presents not only our financial performance but also our environmental, social, and governance (“ESG”) strategies,
commitments, and results. It provides a more holistic view of Brown-Forman, our culture, our strategic approach to our business, and how we achieve results.
Portfolio and Responsibility
We seek to build brands and create shareholder value responsibly by delivering strong and sustainable growth, solid margins, and high returns on invested
capital. We focus on building brands that can be meaningful for our company and our consumers over the longer term. We aim to grow our premium spirits
portfolio both organically and through innovation. Opportunistically and thoughtfully, we also consider acquisitions and partnerships that will enhance ourcapacity to deliver meaningful growth, improve margins, and increase shareholder returns.
We strive to grow our brands and enhance consumers' experience with them. Even as we do so, we remain committed to marketing our brands
responsibly and promoting responsible drinking. Regulation of our industry is not new, and external interest from the World Health Organization and other
health bodies has grown over time. We uphold high standards of self-regulation by adhering to industry guidelines on responsible marketing and advertising.
We work both independently and with industry organizations to promote alcohol responsibility, such as the International Alliance for Responsible Drinking, theFoundation for Advancing Alcohol Responsibility (responsibility.org) in the United States, The Portman Group in the United Kingdom, DrinkWise in Australia,
and FISAC in Mexico.

9

The Jack Daniel's family of brands, led by Jack Daniel's Tennessee Whiskey (JDTW), is our most valuable asset – the engine of our overall financial
performance and the foundation of our leadership position in the American whiskey category1. We strive to strengthen the brand's leadership position, and will
steadfastly work to keep JDTW relevant to consumers worldwide, while pursuing the opportunities to grow the Jack Daniel's family of brands across markets,
premium-and-above price points, channels, and consumer groups. Product innovation continues to contribute meaningfully to our performance. Different Jack
Daniel's expressions have brought new consumers to the franchise, including Honey (2011), Fire (2015), Rye (2017), Apple (2019), and our most recent launch,Jack Daniel's 10 Year Old Tennessee Whiskey (2021), which individually and collectively add great value to the company and to our consumers the world over.
In addition to the leadership of our Jack Daniel's family of brands, we expect strong worldwide growth from our other whiskey brands, particularly
Woodford Reserve and Old Forester. Woodford Reserve is the leading super-premium American whiskey globally1, growing volumes at a strong double-digit
compound annual growth rate since the brand was introduced 25 years ago. Woodford Reserve surpassed 1.4 million nine-liter cases of annual volume as ofApril 30, 2022. We believe the brand is poised for continued growth as the bourbon category continues to grow around the world. Old Forester has continued
its return to prominence in the United States and in select international markets. Innovation has played an important role in the premiumization of both of thesebrands, including the success of high-end expressions such as Woodford Reserve Double Oaked and the Old Forester Whiskey Row Series.
Outside of our American whiskey brands, we believe our portfolio remains well positioned in other high-growth categories with meaningful premium
brands and a focus on accelerating our super-premium portfolio. Our tequila portfolio is led by two brands steeped in Mexican heritage, Herradura and el
Jimador. Despite the cyclical cost pressures resulting from the unprecedented cost of agave, we remain pleased with the growth of our tequila business in the
United States and the long-term growth prospects of this business globally. We believe that our Scotch whiskies GlenDronach, Benriach, and Glenglassaugh,and our Irish whiskey Slane, are well-positioned in their respective categories. We expect them all to become meaningful contributors over the longer term.
Lastly, we believe our acquisition of Fords Gin in the summer of 2019 provides access to the premium gin category, particularly in the United States, and welook to grow this brand in key gin markets globally.
Fiscal 2022 was another year of growth for our ready-to-drink (RTD) portfolio. Jack Daniel's RTDs are approaching 14 million nine-liter cases globally.
In Mexico, our el Jimador tequila-based RTD, New Mix, sold approximately 8 million nine-liter cases. In calendar 2020 we introduced Jack Daniel's Can
Cocktails in the United States and also announced a new partnership with Pabst Brewing Company for the supply, sales, and distribution of Jack Daniel'sCountry Cocktails in this important market. In December 2020, we acquired Part Time Rangers, a line of low-calorie, spirit-based RTDs with natural fruit
flavorings. Part Time Rangers is based in New Zealand, and we believe it will help us grow our RTD portfolio in that country, Australia, and potentiallybeyond.
We appreciate the power of our brands to enrich the experience of life, and we believe it is our duty to ensure that our products are marketed and enjoyedwith deep respect for our consumers. Our mission for alcohol responsibility is to empower mindful choices around beverage alcohol. We launched the Pause
campaign in 2019. Pause is Brown-Forman’s driving effort to encourage mindful choices. The campaign began by raising awareness and inspiring action fromour colleagues and business partners around the importance of alcohol responsibility.
Geography
The United States remains our largest market, and continued growth there is important to our long-term success. We expect to foster this growth byemphasizing fast-growing spirits categories, continued product and packaging innovation, and brand building within growing consumer segments. This
includes increasing emphasis on inclusive, digital, and integrated marketing and the growth of our e-commerce capabilities to better connect and engage with
consumers where they are.
Outside the United States, we continue to increase our competitiveness through improved routes to consumers. In 2022, we established our owneddistribution organizations for Belgium & Luxembourg and Taiwan. More direct connection with customers and consumers enabled through owned distribution
is an important part of our strategic growth.
The COVID-19 pandemic has impacted our global markets differently. While the recovery has been varied by geography, we expect increasing
contributions to our long-term future growth from emerging markets, including Brazil, China, India, Mexico, Poland, and Southeast Asia.

1

IWSR 2022

10

People, Diversity & Inclusion, and Ethics & Compliance
As we work to increase our brands' relevance and appeal to diverse consumer groups around the world, we believe a diversity of experiences andmindsets within our own workforce is essential. In the summer of 2019, we unveiled Many Spirits, One Brown-Forman: Gender and Race Edition, our 2030
Diversity & Inclusion Strategy aimed at creating a foundation from which to build a more diverse workforce and inclusive culture. In the summer of 2020, wedeveloped and published commitments to be better and do better – to live our value of respect, educate ourselves more fully on what it means to be anti-racist,
identify and eliminate barriers to inclusion, create an environment where all employees can bring their best selves to work, and extend our commitment moredeeply in our communities, especially our hometown of Louisville, Kentucky. We believe these actions will help us continue to build an inclusive culture at
Brown-Forman.
Our vision is to create an environment where leveraging diversity and inclusion occurs naturally, giving us a sustainable marketplace advantage. We have
set race and gender ambitions to have at least 50% women in professional- and leader-level roles globally, 40% women in senior leadership positions globally,and 25% people of color in our United States workforce by 2030. We have also set a goal to reach 16% of our supplier spend in locations such as the UnitedStates, the United Kingdom, and Australia, with businesses that are woman- or minority-owned by 2030. For more than a decade, we have earned a perfectscore in the Corporate Equality Index, a national benchmarking survey and report on corporate policies and practices related to LGBTQ workplace equality
administered by the Human Rights Campaign Foundation.
One of the main drivers of Brown-Forman’s inclusive culture is the continued growth and leadership of our 10 Employee Resource Groups (ERGs). We
believe ERGs are instrumental in enriching our company's culture, and our employees experience this by supporting development and engagement of ourdiverse workforce, driving cultural awareness and competency across the organization, and enabling authentic engagement with our consumers. Our ERGs also
create spaces for our employees and their allies to connect with, support, and advocate for one another.
Our core values of integrity, respect, trust, teamwork, and excellence form the foundation of our ethics and compliance program. “Values Drive
Decisions” is the key theme of this program, and we use it to teach our employees to rely on our values when faced with a difficult decision and to “speak up”
if they believe they, a colleague, or a business partner may have violated the law, our Code of Conduct, or company policy. In 44 countries, we offer a thirdparty service to employees and others who choose to “speak up” anonymously. We deliver training to Managers reinforcing our commitment to non-retaliationand maintaining a “Speak-Up” culture.
We convey our compliance expectations to employees via our Code of Conduct, and all employees certify annually that they will comply with the Codeof Conduct and report a potential violation. The Code of Conduct is a toolkit for employees, as it details expectations for 18 different risks, includes links to
Q&A, policies, training and the ability to contact a subject-matter expert. Our Code of Conduct and certification is refreshed annually and is available in 13
languages.
Investment and Sustainability
One thing we have learned over more than a century and a half is that long-term success requires investment and a mindset of sustainability. We
understand the need to invest in our brands, global supply chain facilities, homeplace and visitor centers, and aging inventory. For example, in fiscal 2021, ourBoard of Directors approved a $125 million capital investment to expand our bourbon-making capacity in Kentucky to meet anticipated future consumer
demand. Additionally, in fiscal 2022 our Board of Directors approved a $50 million capital investment to expand our scotch-making capacity to meet
anticipated future demand. We also understand the importance of investing in our people, communities, and the environment. We recognize that climate change
is a business issue with risks and opportunities. As such, we are committed to actions that will ensure the long-term health of the planet and our business. In
fiscal 2021, we established a new 2030 Sustainability Strategy to align our efforts with industry best practices and the most current climate science. Our new
goals broaden our focus beyond business operations to include our supply chain, where the majority of our environmental footprint resides. With this new
strategy, we have a roadmap for continued progress over the next quarter-century.

11

Our recent investments in renewable energy and resource stewardship underscore our long-term focus:•

Wind: Our partnership with the East Fork Wind project, which became operational in April 2020, provides a renewable energy source that offsets
more than 90% of our electricity usage in the United States.

•

Solar: Last year, Jack Daniel's announced a partnership to provide our Lynchburg distillery with 20 megawatts of solar energy. The agreement will
provide nearly three-quarters of the distillery's electricity needs, and makes Jack Daniel's the first distillery to participate in Tennessee Valley
Authority's Green Invest Program.

•

Watersheds: To manage water risk, we have completed watershed risk assessments to evaluate watersheds we operate in that are considered at-riskor business critical. Following the assessments, we have begun to develop multi-year mitigation plans to address risk.

•

Waste: In 2020, we were pleased to achieve our zero-waste-to-landfill (defined as sending less than 1% to landfill) goal across our production
facilities. Our next priority is to integrate circular economy principles into our business that will allow us to go beyond zero-waste to a regenerative
approach where resources are continually reused.

We believe we are better positioned than ever to deliver exceptional high-quality products to our consumers around the world. We have a highly capableand engaged workforce. We have developed brand-building capabilities by equipping our teams with the training and tools necessary for an increasingly datadriven digital global marketplace. Among other trends, the expansion of the digital economy accelerated significantly as consumers, businesses, andcommunities adapted to the challenges brought on by the COVID-19 pandemic. To continue our success in how we market and sell our brands, we announced
in fiscal 2021 an investment in a new Integrated Marketing Communications organization that we believe will further enhance our ability to win in the digital
economy.
Community
In addition to the investments we make in our employees, we believe it is vital that we give back to the communities that support both our employees andour company by thoughtfully deploying our time, talent, and resources. We have been a proud corporate citizen of our hometown of Louisville, Kentucky, since
we were founded. Being a good neighbor is something we strive for wherever we operate, and our expanded focus and commitment to the neighborhood
around our corporate campus meets this call to be the best neighbor we can be in an area that has experienced the effects of underinvestment and systemic
racism.
We also continue to expand our civic engagement into Brown-Forman global office locations, allowing those employees closest to the needs of theircommunities to decide how to invest their charitable-giving resources. We leverage our key community relations partners to stay informed of collaborative
opportunities in the communities where we work and live, and to shape our charitable-giving strategy to meet the essential needs of the communities thatsustain us. We provide charitable donations and our employees volunteer throughout our communities, including 128 serving on 230 nonprofit boards in the
United States. The Brown-Forman Foundation (the Foundation) was created in fiscal 2018 with the goal of helping fund our ongoing philanthropic endeavors.
The Foundation's earnings provide a consistent source of revenue for charitable giving

12independent of our annual earnings. We work to partner with organizations that support our key focus areas: empowering responsible and sustainable living,ensuring essential living standards, and enhancing arts and cultural living. As part of our commitment to be better and do better as neighbors and as corporate
citizens, the Brown-Forman Foundation made a 10-year, $50 million commitment to five organizations in west Louisville in 2022, which is the largest
investment in its history. Our partner organizations include AMPED, the Louisville Central Community Center, the Louisville Urban League, Simmons College
of Kentucky, and the West End School. Together, these organizations will advance educational opportunities in west Louisville, from early childhood throughadult learning.
We believe that having a long-term-focused, committed, and engaged shareholder base, anchored by the Brown Family, gives us a distinct strategic
advantage, particularly in a business with multi-generational brands and products that must be aged. We are committed to continually improving ourenvironmental, social, and governance performance and acting upon our deeply held values. Recognizing the strong cash-generating capacity and the capitalefficiency of our business, we will continue to pursue top-tier shareholder return through shareholder-friendly capital allocation and socially andenvironmentally conscious investments to fuel long-term growth.
Human Capital Resources
Overview: Culture of Care
We put our values at the forefront of all our decisions and actions, in an effort to make our employees feel respected, safe, and supported so they canmake, market, and sell our products with the finest craftsmanship, quality, and care. What enables our success are the 5,200 people (excluding individuals thatwork on a part-time or temporary basis) we employ in 43 countries around the world. This includes approximately 3,400 salaried employees and 1,800 hourly
employees, with the largest percentage of our employees residing within the United States, Mexico, and the United Kingdom. We believe our employee
relations are good and our turnover rate is low.
COVID-19 Response
Shortly after the global pandemic began, we shifted nearly all global salaried employees to a virtual working environment and safely maintained ouressential production operations. Over the last year, salaried employees have begun returning to their offices as local conditions have allowed. We welcomedsalaried employees back to our Louisville headquarters on May 2, 2022, where we have made investments in our facilities and services to ease this transition.
The majority of our employees will be working under a hybrid work style going forward, working a minimum of three days per week in the office and theremaining days at home (or the location of their choice). We believe this structure will allow our employees to collaborate and build relationships, while
enjoying the flexibility that they have come to appreciate. Flexibility has been a cultural priority at Brown-Forman since well before the pandemic and we arepleased to have found a solution that meets the needs of our business and our employees.
Structural Investments
We launched a new capability and organization within Brown-Forman that we call “Integrated Marketing Communications” (IMC). IMC focuses ondriving excellence within five highly integrated, interdependent disciplines: e-commerce, Media, Performance, Search, and Content. These disciplines aresupported by increased investments to advance our consumer-centric philosophy, agile processes, technology, and our organization, which has beensignificantly enhanced to support this initiative. The IMC organization consists of many marketers around the world who are solely focused on advancing ourdigital marketing and e-commerce initiatives. This includes new roles that we have recently created, which has given us the opportunity to elevate internaltalent as well as incorporate external talent from leading companies with critical expertise. Through IMC, we can better meet consumers where they are bycustomizing content to maximize relevance and more effectively drive their behavior. We can now do this in real time and at scale. By integrating e-commerce
within IMC, we can create a truly cohesive end-to-end consumer journey starting from awareness and closing the loop with sales.
Diversity & Inclusion
We are continuing to pursue our 2030 Diversity & Inclusion strategy, as outlined in Many Spirits, One Brown-Forman: Gender and Race Edition. This
year, we continued to increase the number of women in senior leadership globally and people of color in the United States through both internal promotions
and external hiring.
To support our culture of inclusion, all executive leaders participated in our six month Inclusive Leadership Program. This group completed the programat the end of the calendar year and we have recently begun cascading it down to our business leaders.

13Workforce Stability
We must remain focused on winning the war for talent in a marketplace where opportunities abound and highly skilled knowledge workers can work fromanywhere. While we have historically enjoyed low turnover amongst our salaried population, we have tracked our departures carefully over the last year, given
the acceleration of the job market. We have analyzed our data quarterly, looking at cuts by gender, ethnicity, function, location, age, management level, etc. inaddition to qualitative exit interview data. We have been pleased to find that our turnover remains consistent with our pre-pandemic levels. We will, of course,
continue to monitor our data carefully.

14

Executive Officers
Information about Our Executive Officers
The following persons served as executive officers as of June 17, 2022:
Name

Age

Lawson E. Whiting

53 President and Chief Executive Officer since 2019. Executive Vice President and Chief Operating Officer from October 2017
to December 2018. Executive Vice President and Chief Brands and Strategy Officer from 2015 to 2017. Senior Vice President
and Chief Brands Officer from 2013 to 2015. Senior Vice President and Managing Director for Western Europe from 2011 to
2013. Vice President and Finance Director for Western Europe from 2010 to 2011. Vice President and Finance Director for
North America from 2009 to 2010.
62 Executive Vice President and General Counsel since 2021. Executive Vice President, General Counsel and Secretary from2007 to 2021.
52 Senior Vice President and Chief Financial Officer since July 2021. Senior Vice President, Shareholder Relations Officer,
Global Commercial Finance, and Financial Planning and Analysis from August 2020 to June 2021. Senior Vice President,
Shareholder Relations Officer from August 2019 to July 2020. Senior Vice President, and General Manager - Brown-Forman
Brands from May 2015 to July 2019. Vice President, Director of Finance Global Production from October 2013 to April
2015. Vice President, Chief of Staff and Director of Business Development Global Production from November 2009 to
October 2013.
47 Senior Vice President and Chief Brands Officer since January 2020. Senior Vice President and Managing Director of Jack
Daniel’s Family of Brands from August 2018 to January 2020. Vice President and General Manager of Mexico from January
2016 to August 2018. Vice President Latin America Marketing and Chief of Staff from October 2009 to January 2016.
52 Senior Vice President and Chief Accounting Officer since August 2018. Vice President and Director Finance (North America
Region) from 2015 to August 2018. Director NAR Division Finance (North America Region) from 2013 to 2015. Director
Business Planning and Analytics (North America Region) from 2012 to 2013.
75 Senior Vice President, Chief Corporate Citizenship Officer since February 2022. Senior Vice President, Chief Diversity
Inclusion and Global Community Relations Officer from March 2019 to February 2022. Vice President and Chief Diversity
Officer from 2007 to 2019.
51 Senior Vice President, President Europe since August 2020. Senior Vice President, Managing Director, Global Travel Retailand Developed APAC Region from August 2018 to July 2020. Senior Vice President, Managing Director, Global Travel
Retail from July 2018 to May 2015. Vice President, Managing Director, Jack Daniel’s Tennessee Honey from January 2014 toApril 2015. Vice President, Managing Director, Australia/New Zealand region from 2010 to 2014.
52 Senior Vice President, Chief People, Places, and Communications Officer since May 2021. Senior Vice President, Chief
Human Resources and Corporate Communications Officer from March 2019 to April 2021. Senior Vice President and Chief
Human Resources Officer from February 2015 to February 2019. Senior Vice President and Director of Human Resources
Business Partnerships from 2013 to 2015. Vice President and Director of Organization and Leader Development from 2011 to2013.
62 Senior Vice President, President, U.S.A. and Canada since June 2018. Senior Vice President, Chief Marketing Officer ofBrown-Forman Brands from February 2015 to June 2018. Senior Vice President, Managing Director Jack Daniel’s from 2011
to 2015.
60 Senior Vice President, President Emerging International since August 2020. Senior Vice President, President, International
Division from June 2018 to July 2020. Senior Vice President and President for Europe, North Asia, and ANZSEA fromFebruary 2015 to June 2018. Senior Vice President and Managing Director for Europe from 2013 to 2015. Senior Vice
President and Managing Director for Greater Europe and Africa from 2006 to 2013.
51 Senior Vice President, Chief Global Supply Chain and Technology Officer since March 2022. Senior Vice President, Chief
Information and Advanced Analytics Officer from January 2015 to February 2022. Vice President Director Technical Services
from May 2013 to December 2014. Vice President Director Wines/ENV/Govt Comp 2011 to 2013.
51 Vice President, Chief Inclusion and Global Community Relations Officer since June 2022. Vice President and Chief Diversity
Officer from February 2022 to June 2022. Vice President and Human Resources Director - Global Production, Diversity andInclusion from March 2021 to January 2022. Vice President and Human Resources Director - Global Production from August
2017 to February 2021. Vice President and Human Resources Director - North America Region from May 2015 to July 2017.
Human Resources Director - North America Region and Latin America Region from May 2013 to April 2015.

Matthew E. Hamel
Leanne D. Cunningham

Matias Bentel
Kelli N. Brown
Ralph E. de Chabert
Marshall B. Farrer

Kirsten M. Hawley

John V. Hayes
Thomas W. Hinrichs

Timothy M. Nall
Crystal L. Peterson

Principal Occupation and Business Experience15

Available Information
Our website address is www.brown-forman.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, andany amendments to these reports are available free of charge on our website as soon as reasonably practicable after we electronically file those reports with the
Securities and Exchange Commission (SEC). The information provided on our website, and any other website referenced herein, is not part of this report, andis therefore not incorporated by reference into this report or any other filing we make with the SEC, unless that information is otherwise specificallyincorporated by reference.
On our website, we have posted our Code of Conduct that applies to all our directors and employees, and our Code of Ethics that applies specifically to
our senior financial officers. If we amend or waive any of the provisions of our Code of Conduct or our Code of Ethics applicable to our principal executive
officer, principal financial officer, or principal accounting officer that relates to any element of the definition of “code of ethics” enumerated in Item 406(b) ofRegulation S-K under the Securities Exchange Act of 1934 Act, as amended, we intend to disclose these actions on our website. We have also posted on our
website our Corporate Governance Guidelines and the charters of our Audit Committee, Compensation Committee, Corporate Governance and Nominating
Committee, and Executive Committee of our Board of Directors. Copies of these materials are also available free of charge by writing to our Secretary at 850
Dixie Highway, Louisville, Kentucky 40210 or emailing Secretary@b-f.com.
Item 1A. Risk Factors
We believe the following discussion identifies the material risks and uncertainties that could adversely affect our business. If any of the following risks
were actually to occur, our business, results of operations, cash flows, or financial condition could be materially and adversely affected. Additional risks not
currently known to us, or that we currently deem to be immaterial, could also materially and adversely affect our business, results of operations, cash flows, or
financial condition.
Risks Related to Our Business and Operations
Our business performance is substantially dependent upon the continued health of the Jack Daniel's family of brands.
The Jack Daniel's family of brands is the primary driver of our revenue and growth. Jack Daniel's is an iconic global trademark with a loyal consumer fanbase, and we invest much effort and many resources to protect and preserve the brand's reputation for authenticity, craftsmanship, and quality. A brand's
reputational value is based in large part on consumer perceptions, and even an isolated incident that causes harm – particularly one resulting in widespread
negative publicity – could adversely influence these perceptions and erode consumer trust and confidence in the brand. Significant damage to the brand equityof the Jack Daniel's family of brands would adversely affect our business. Given the importance of Jack Daniel's to our overall success, a significant orsustained decline in volume or selling price of our Jack Daniel's products, as a result of negative publicity or otherwise, would have a negative effect on our
financial results. Additionally, should we not be successful in our efforts to maintain or increase the relevance of the Jack Daniel's brand to current and future
consumers, our business and operating results could suffer. For details on the importance of the Jack Daniel's family of brands to our business, see “Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Fiscal 2022 Brand Highlights.”
Changes to our route-to-consumer models and consolidation among beverage alcohol producers, distributors, wholesalers, suppliers, and retailers, could
hinder the marketing, sale, or distribution of our products.
We use various business models to market and distribute our products in different countries around the world. In the United States, we sell our products
either to distributors for resale to retail outlets or e-commerce retailers or, in those states that control alcohol sales, to state governments who then sell them toretail customers and consumers. In our non-U.S. markets, we use a variety of route-to-consumer models – including, in many markets, reliance on third parties
to distribute, market and sell our products. We own and operate distribution companies for 14 international markets. Transitioning from a third-party
distribution model to an owned distribution model involves significant investment, and subjects us to risks associated with that geographic region. If we areunsuccessful in our route-to-consumer strategies, including any transition to owned distribution, the sale and marketing of our products could be disrupted.
Consolidation, whether domestically or internationally, among spirits producers, distributors, wholesalers, suppliers, or retailers and the increased growthof the e-commerce environment across the consumer product goods market could create a more challenging competitive landscape for our products.
Consolidation accelerated during the COVID-19 pandemic and the resulting quarantines, “stay at home” orders, travel restrictions, retail store closures, social
distancing requirements, and other government actions, created a more challenging competitive landscape for our products. Consolidation at any level could
hinder the distribution and sale of our products as a result of reduced attention and resources allocated to our brands both during and16

after transition periods, because our brands might represent a smaller portion of the new business portfolio. Furthermore, consolidation of distributors may leadto the erosion of margins as newly consolidated distributors take down prices. Changes in distributors' strategies, including a reduction in the number of brands
they carry, the allocation of shelf space for our competitors' brands, or private label products, may adversely affect our growth, business, financial results, andmarket share.
Changes to any of our route-to-consumer models or partners in important markets could result in temporary or longer-term sales disruption, higher costs,
and harm to other business relationships we might have with that partner. Disruption of our distribution network or fluctuations in our product inventory levels
at distributors, wholesalers, or retailers could negatively affect our results for a particular period. Moreover, other suppliers, as well as wholesalers and retailersof our brands, offer products that compete directly with ours for shelf space, promotional displays, and consumer purchases. Pricing (including pricepromotions, discounting, couponing, and free goods), marketing, new product introductions, entry into our distribution networks, and other competitive
behavior by other suppliers, and by wholesalers and traditional and e-commerce retailers, could adversely affect our growth, business, and financial results.
While we seek to take advantage of the efficiencies and opportunities that large retail customers can offer, they often seek lower pricing and increased purchasevolume flexibility, offer competing private label products, and represent a large number of other competing products. If the buying power of these large retailcustomers continues to increase, it could negatively affect our financial results. Further, while we believe we have sufficient scale to succeed relative to ourmajor competitors, we nevertheless face a risk that continuing consolidation of large beverage alcohol companies could put us at a competitive disadvantage.
As noted above, e-commerce distribution grew dramatically early in the COVID-19 pandemic and is likely to continue growing in the future. Ourcompetitors may respond to industry and economic conditions and shifts in consumer behaviors more rapidly or effectively than we do. To remain competitive,
we must be agile and efficient in adopting digital technologies, and building analytical capabilities, particularly following the COVID-19 pandemic, which ourcompetitors may be able to achieve with more agility and resources.
Changes in consumer preferences and purchases, any decline in the social acceptability of our products, or governmental adoption of policies
disadvantageous to beverage alcohol could negatively affect our business results.
We are a branded consumer products company in a highly competitive market, and our success depends substantially on our continued ability to offer
consumers appealing, high-quality products. Consumer preferences and purchases may shift, often in unpredictable ways, including health and wellness trends;
changes in economic conditions, demographic, and social trends; public health policies and initiatives; changes in government regulation of beverage alcohol
products; concerns or regulations related to product safety; legalization of cannabis and its use on a more widespread basis within the United States, Canada, or
elsewhere; and changes in trends related to travel, leisure, dining, gifting, entertaining, and beverage consumption trends. Consumers may begin to shift theirconsumption and purchases from our premium and super-premium products, more commonly found in on-premise establishments, in favor of off-premisepurchases or away from alcoholic beverages entirely. This includes consumption at home as a result of various factors, including the COVID-19 pandemic,
shifts in social trends, and shifts to purchases of our products to e-commerce retailers. These shifts in consumption and purchasing channels, which could
adversely impact our profitability, have accelerated during the COVID-19 pandemic and the resulting quarantines, “stay at home” orders, travel restrictions,retail, restaurant, bar, and hotel closures, social distancing requirements, and other government action. Consumers also may begin to prefer the products ofcompetitors or may generally reduce their demand for brands produced by larger companies. Over the past several years, the number of small, local distilleries
in the United States has grown significantly. This growth is being driven by a trend of consumers showing increasing interest in locally produced, regionallysourced products. As more brands enter the market, increased competition could negatively affect demand for our premium and super-premium American
whiskey brands, including Jack Daniel’s. In addition, we could experience unfavorable business results if we fail to attract consumers from diverse
backgrounds and ethnicities in all markets where we sell our products. Also, expansion into new product categories by other suppliers, or innovation by new
entrants into the market, could increase competition in our product categories. For example, we have observed an increase in diversification by various
consumer goods companies such as the entrance of both traditional beer and soft drink companies into the RTD market and the entrance of both beer and spirits
companies into the cannabis market – expanding the potential for competition in the spirits market from various sectors of the consumer goods industry.
Increased competition may, among other things, negatively impact our ability to maintain or gain market share; increase pricing pressure, which inhibits ourability to adequately respond to inflationary changes in commodities used in making our products; require increases in marketing and promotional activities;
and negatively impact the market for our premium and super-premium products. To continue to succeed, we must anticipate or react effectively to shifts indemographics, our competition, consumer behavior, consumer preferences, drinking tastes, and drinking occasions.
Our long-term plans call for the continued growth of the Jack Daniel's family of brands. If these plans do not succeed, or if we otherwise fail to develop
or implement effective business, portfolio, and brand strategies, our growth, business, or17financial results could suffer. More broadly, if consumers shift away from spirits (particularly brown spirits such as American whiskey and bourbon), ourpremium-priced brands, or our RTD products, our financial results could be adversely affected.
We believe that new products, line extensions, label and bottle changes, product reformulations, and similar product innovations by both our competitors
and us will compete increasingly for consumer drinking occasions. Product innovation, particularly for our core brands, is a significant element of our growthstrategy; however, there can be no assurance that we will continue to develop and implement successful line extensions, packaging, formulation or flavorchanges, or new products.
Unsuccessful implementation or short-lived popularity of our product innovations could result in inventory write-offs and other costs, reduction in profits
from one year to the next, and also could damage consumers' perception of our brand family. Our inability to attract consumers to our product innovations
relative to our competitors' products – especially over time – could negatively affect our growth, business, and financial results.
Production facility disruption could adversely affect our business.
Some of our largest brands, including Jack Daniel's and our tequilas, are distilled at single locations. A catastrophic event causing physical damage,disruption, or failure at any one of our major distillation or bottling facilities, including facilities that support the production of our premium brands such as
Woodford Reserve and Old Forester, could adversely affect our business. Further, because whiskeys and some tequilas are aged for various periods, we
maintain a substantial inventory of aged and maturing products in warehouses at a number of different sites. The loss of a substantial amount of aged inventory– through fire, other natural or man-made disaster, contamination, or otherwise – could significantly reduce the supply of the affected product or products.
These and other supply (or supply chain) disruptions could prevent us from meeting consumer demand for the affected products in the near term or the shortterm. In addition to catastrophic events identified above, supply disruptions could include the temporary inability to make our products at normal levels or atall. We could also experience disruptions if our suppliers are unable to deliver supplies as a result of the COVID-19 pandemic or otherwise. Disaster recovery
plans may not prevent business disruption, and reconstruction of any damaged facilities could require a significant amount of time and resources.
The inherent uncertainty in supply/demand forecasting could adversely affect our business, particularly with respect to our aged products.
There is an inherent risk of forecasting imprecision in determining the quantity of aged and maturing products to produce and hold in inventory in a given
year for future sale. The forecasting strategies we use to balance product supply with fluctuations in consumer demand may not be effective for particular years
or products. For example, in addition to our American and Irish whiskeys and some tequilas, which are aged for various periods, our Scotch whisky brands,
require long-term maturation – an average of 12 years with limited releases of 30 years or more – making forecasts of demand for such products in future
periods subject to significant uncertainty. Our tequila supply is also dependent on the growth cycle of our agave plants which take approximately seven years toreach full maturity, requiring us to make forecasts of demand for our tequilas over a long-time horizon to determine in advance how much agave to plant.
Factors that affect our ability to forecast accurately include changes in business strategy, market demand, consumer preferences, macroeconomic conditions,introductions of competing products, and other changes in market conditions. Additionally, our supply of aged products can deviate from expectations due tochanges in forecasted maturation loss. Any forecasting error could lead to our inability to meet the objectives of our business strategy, failure to meet future
demand, or a future surplus of inventory and consequent write-down in value of raw materials. A failure to accurately forecast demand for our products orefficiently manage inventory, could have a material adverse effect on our business and financial results. Further, we cannot be certain that we will be successful
in using various levers, such as pricing changes, to create the desired balance of available supply and consumer demand for particular years or products. As aconsequence, we may be unable to meet consumer demand for the affected products for a period of time. Furthermore, not having our products in the market
consistently may adversely affect our brand equity and future sales.
Higher costs or unavailability of water, raw materials, product ingredients, or labor could adversely affect our financial results.
Our products use materials and ingredients that we purchase from suppliers. Our ability to make and sell our products depends upon the availability of the
raw materials, product ingredients, finished products, wood, glass and PET bottles, cans, bottle closures, packaging, and other materials used to produce andpackage them. Without sufficient quantities of one or more key materials, our business and financial results could suffer. For instance, only a few glass
producers make bottles on a scale sufficient for our requirements, and a single producer supplies most of our glass requirements. Beginning in 2020, as a resultof global supply chain challenges, our primary glass provider was not able to produce sufficient quantities to meet our needs, which increased our cost of
production and adversely affected our financial results. While we continue to see improvements in our glass supply, overall supply chain logistics andtransportation continue to be constrained, impacting our route to market

18

costs and lead times. We project that logistics and transport constraints will persist at least through calendar 2022 and possibly through calendar 2023. Similar
new supply chain challenges may occur in the future, making it difficult and more expensive to produce and deliver our products. For example, if we were toexperience a disruption in the supply of American white oak logs or steel to produce the new charred oak barrels in which we age our whiskeys, our production
capabilities could be compromised. If any of our key suppliers were no longer able to meet our timing, quality, or capacity requirements, ceased doing businesswith us, or significantly raised prices, and we could not promptly develop alternative cost-effective sources of supply or production, our operations andfinancial results could suffer.
Higher costs or insufficient availability of suitable grain, agave, water, grapes, wood, glass, closures, and other input materials, or higher associated laborcosts or insufficient availability of labor, may adversely affect our financial results. Similarly, when energy costs rise, our transportation, freight, and otheroperating costs, such as distilling and bottling expenses, also may increase. Our freight cost and the timely delivery of our products could be adversely affectedby a number of factors that could reduce the profitability of our operations, including driver or equipment shortages, higher fuel costs, weather conditions,traffic congestion, shipment container availability, rail shut down, increased government regulation, and other matters. Our financial results may be adversely
affected if we are not able to pass along energy, freight, or other input cost increases through higher prices to our customers without reducing demand or sales.
For example, in connection with the COVID-19 pandemic, we experienced supply chain disruptions in connection with the availability of timely modes oftransportation to ship our products globally.
International or domestic geopolitical or other events, including the imposition of any tariffs or quotas by governmental authorities on any raw materials
that we use in the production of our products, could adversely affect the supply and cost of these raw materials to us. For example, the global economy has
been negatively impacted by Russia’s invasion of Ukraine. Global grain and energy markets have become increasingly volatile as sanctions have been imposedon Russia by other countries, including the United States and the European Union, in response to the invasion. As a result, we have suspended our operations in
Russia, and it is not clear if, or when, we will be able to resume doing business in Russia. While we do not currently expect our production operations to be
directly impacted by the conflict, changes in global grain and commodity pricing and availability may impact the markets in which we operate. If we cannot
offset higher raw material costs with higher selling prices, increased sales volume, or reductions in other costs, our profitability could be adversely affected.
Weather, the effects of climate change, fires, diseases, and other agricultural uncertainties that affect the mortality, health, yield, quality, or price of thevarious raw materials used in our products also present risks for our business, including in some cases potential impairment in the recorded value of ourinventory. Climate change could also affect the maturation and yield of our aged inventory over time. Changes in weather patterns or intensity can disrupt our
supply chain as well, which may affect production operations, insurance costs and coverage, and the timely delivery of our products.
Water is an essential component of our products, so the quality and quantity of available water is important to our ability to operate our business. If
extended droughts become more common or severe, or if our water supply were interrupted for other reasons, high-quality water could become scarce in somekey production regions for our products, including Tennessee, Kentucky, California, Finland, Mexico, Scotland, and Ireland, which in turn could adversely
affect our business and financial results.
Our business faces various risks related to health epidemics and pandemics, including the COVID-19 pandemic and similar outbreaks, that could
materially and adversely affect our business, our operations, our cash flows, and our financial results.
Our business, operations, cash flows, and financial results have been impacted and will likely continue to be impacted by health epidemics, pandemics,
and similar outbreaks, such as the COVID-19 pandemic. The COVID-19 pandemic has had and could continue to have negative impacts, such as (a) a global or
U.S. recession or other economic crisis; (b) credit and capital markets volatility (and access to these markets, including by our suppliers and customers); (c)volatility in demand for our products; (d) changes in accessibility to our products due to illness, quarantines, “stay at home” orders, travel restrictions, retail,restaurant, bar, and hotel closures, social distancing requirements, and other government action; (e) changes in consumer behavior and preferences; and (f)disruptions in raw material supply, our manufacturing operations, or in our distribution and supply chain. Furthermore, during the COVID-19 pandemic, wewere affected in markets where, in connection with other government actions taken to slow the spread of the COVID-19 pandemic, liquor sales were
temporarily restricted or banned outright such as in the Commonwealth of Pennsylvania in the United States, and in South Africa, India, and other Asian
countries. In addition, we may incur increased costs and otherwise be negatively affected if a significant portion of our workforce (or the workforces within our
distribution or supply chain) is unable to work or work effectively, including because of illness, quarantines, “stay at home” orders, social distancing
requirements, other government action, facility closures, or other restrictions.

19

The full impact of the COVID-19 pandemic (and any related variations) depends on factors beyond our knowledge or control, including the duration,
severity, and potential resurgence of the outbreak and actions taken to contain its spread and mitigate the public health effects, including vaccine efficacy, andits short- and long-term impacts on the economy, unemployment, consumer confidence, and the financial health of our suppliers, distributors, customers, andretailers. We cannot predict with certainty the full impact of the COVID-19 pandemic on our business or our future financial or operational results. For further
discussion on the impact of the COVID-19 pandemic on our business and financial results, see “Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Significant Developments - COVID-19.”
Unfavorable economic conditions could negatively affect our operations and results.
Unfavorable global or regional economic conditions may be triggered by numerous developments beyond our control, including geopolitical events,
health crises such as the COVID-19 pandemic, and other events that trigger economic volatility on a global or regional basis. Those types of unfavorable
economic conditions could adversely affect our business and financial results. In particular, a significant deterioration in economic conditions, including
economic slowdowns or recessions, increased unemployment levels, inflationary pressures or disruptions to credit and capital markets, could lead to decreased
consumer confidence in certain countries and consumer spending more generally, thus reducing consumer demand for our products. For example, in 2021 andcontinuing into 2022, the United States and European Union have experienced a rapid increase in inflation levels. Such heightened inflationary levels may
negatively impact consumer disposable income and discretionary spending and, in turn, reduce consumer demand for our premium products and increase ourcosts. Unfavorable economic conditions could also cause governments to increase taxes on beverage alcohol to attempt to raise revenue, reducing consumers'
willingness to make discretionary purchases of beverage alcohol products or pay for premium brands such as ours.
Unfavorable economic conditions could also adversely affect our suppliers, distributors, customers, and retailers, who in turn could experience cash flow
challenges, more costly or unavailable financing, credit defaults, and other financial hardships. Such financial hardships could lead to distributor or retailer
destocking, disruption in raw material supply, increase in bad debt expense, or increased levels of unsecured credit that we may need to provide to customers.
Other potential negative consequences to our business from unfavorable economic conditions include higher interest rates, an increase in the rate of inflation,
deflation, exchange rate fluctuations, credit or capital market instability, or lower returns on pension assets or lower discount rates for pension obligations(possibly requiring higher contributions to our pension plans). For additional details on the effects of COVID-19 on our operations and financial results, see“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Significant Developments - COVID-19.” For details on theeffects of changes in the value of our benefit plan obligations and assets on our financial results, see Note 9 to the Consolidated Financial Statements in “Item8. Financial Statements and Supplementary Data.”
Product recalls or other product liability claims could materially and adversely affect our sales.
The success of our brands depends upon the positive image that consumers have of them. We could decide to or be required to recall products due tosuspected or confirmed product contamination, product tampering, spoilage, regulatory non-compliance, food safety issues, or other quality issues. Any ofthese events could adversely affect our financial results. Actual contamination, whether deliberate or accidental, could lead to inferior product quality and evenillness, injury, or death to consumers, potential liability claims, and material loss. Should a product recall become necessary, or we voluntarily recall a productin the event of contamination, damage, or other quality issue, sales of the affected product or our broader portfolio of brands could be adversely affected. A
significant product liability judgment or widespread product recall may negatively impact sales and our business and financial results. Even if a productliability claim is unsuccessful or is not fully pursued, resulting negative publicity could adversely affect our reputation with existing and potential customers
and our corporate and brand image.
Negative publicity could affect our business performance.
Unfavorable publicity, whether accurate or not, related to our industry or to us or our products, brands, marketing, executive leadership, employees,
Board of Directors, family shareholders, operations, current or anticipated business performance, or environmental or social efforts could negatively affect our
corporate reputation, stock price, ability to attract and retain high-quality talent, or the performance of our brands and business. Adverse publicity or negative
commentary on social media outlets, whether accurate or not, particularly any that go “viral,” could cause consumers or other stakeholders to react by
disparaging or avoiding our brands or company, which could materially negatively affect our financial results. Additionally, investor advocacy groups,
institutional investors, other market participants, shareholders, employees, consumers, customers, and policymakers have focused increasingly on theenvironmental, social, and governance (“ESG”) or “sustainability” positions and practices of companies. If our ESG positions or practices do not meet investor
or other stakeholder expectations and standards, which continue to evolve, our corporate reputation, stock price, ability to attract and20retain high-quality talent, and the performance of our brands and business may be negatively affected. Stakeholders who disagree with our company's actions,
positions, or statements may speak negatively or advocate against the company, with the potential to harm our reputation or business through negative
publicity, adverse government treatment, or other means.
Our failure to attract or retain key talent could adversely affect our business.
Our success depends upon the efforts and abilities of our senior management team, other key employees, and our high-quality employee base, as well as
our ability to attract, motivate, reward, and retain them. Difficulties in hiring or retaining key executive or other employee talent, or the unexpected loss ofexperienced employees resulting in the depletion of our institutional knowledge base, could have an adverse impact on our business performance, reputation,
financial condition, or results of operations. Given changing demographics, changes in immigration laws and policies, the increasing normalization of remote
working, and demand for talent globally, we may not be able to find the right people with the right skills, at the right time, and in the right location, to achieve
our business objectives.
We might not succeed in our strategies for investments, acquisitions, dispositions and other strategic transactions.
From time to time, we acquire or invest in additional brands or businesses. We expect to continue to seek acquisition and investment opportunities that we
believe will increase long-term stockholder value, but we may not be able to find investment opportunities, or purchase brands or businesses, at acceptableprices and terms. Acquisitions and investments involve risks and uncertainties, including potential difficulties integrating acquired brands and personnel; thepossible loss of key customers or employees most knowledgeable about the acquired business; implementing and maintaining consistent U.S. public company
standards, controls, procedures, policies, and information systems; exposure to unknown liabilities; business disruption; and management distraction or
departure. Acquisitions, investments, or joint ventures could also lead us to incur additional debt and related interest expenses or issue additional shares, andresult in a reduction in our earnings per share and a decrease in our return on invested capital. We could incur future restructuring charges or record impairment
losses on the value of goodwill or other intangible assets resulting from previous acquisitions, which may also negatively affect our financial results.
From time to time, we also consider disposing of assets or businesses that may no longer meet our financial or strategic objectives. In selling assets orbusinesses, we may not get prices or terms as favorable as we anticipated. We could also encounter difficulty in finding buyers on acceptable terms in a timely
manner, which could delay our accomplishment of strategic objectives. Expected cost savings from reduced overhead, relating to the sold assets, may notmaterialize. The overhead reductions could temporarily disrupt our other business operations. Any of these outcomes could negatively affect our financial
results.
Risks Related to Our Global Operations
Our global business is subject to commercial, political, and financial risks.
Our products are sold in more than 170 countries; accordingly, we are subject to risks associated with doing business globally, including commercial,political, and financial risks. In addition, we are subject to potential business disruption caused by military conflicts; potentially unstable governments or legal
systems; social, racial, civil, or political upheaval or unrest; local labor policies and conditions; possible expropriation, nationalization, or confiscation ofassets; problems with repatriation of foreign earnings; economic or trade sanctions; closure of markets to imports; anti-American sentiment; terrorism,
kidnapping, extortion, or other types of violence in or outside the United States; and health pandemics (such as COVID-19).
Additionally, in 2018, the United States imposed tariffs on steel and aluminum. In response, a number of countries imposed retaliatory tariffs on U.S.
imports, including on our American whiskey products. Such retaliatory tariffs have negatively affected our results of operations through lower net sales andhigher cost of sales. However, in October 2021, the United States and the European Union reached an agreement whereby, beginning January 1, 2022, the U.S.
lifted the steel and aluminum duties and applied a tariff-rate-quota allowing duty-free importation of steel and aluminum from the European Union based on
historical volumes, and, in response, the European Union suspended its retaliatory tariffs that have been in place on certain U.S. products, including our
American whiskey products. Likewise, in March 2022, the United States and the United Kingdom reached a similar agreement, effective on June 1, 2022. Any
new or additional increases in tariffs, custom duties, or other restrictions or barriers on imports and exports, or the further deterioration of economic relations
between the United States and other countries could result in an increase in the price of our products and, to the extent that we absorb the costs of tariffs, resultin higher cost of goods sold and lower gross profit and margins. Additionally, it could limit the availability of our products and prompt consumers to seek
alternative products. Our success will depend, in part, on our ability to overcome the challenges we encounter with respect to these risks and other factors
affecting U.S. export companies with a global business.
A failure to comply with anti-corruption laws, trade sanctions and restrictions, or similar laws or regulations may have a material adverse effect on ourbusiness and financial results.

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Some of the countries where we do business have a higher risk of corruption than others. While we are committed to doing business in accordance withall applicable laws, including anti-corruption laws and global trade restrictions, we remain subject to the risk that an employee, or one of our many direct orindirect business partners, may take action determined to be in violation of international trade, money laundering, anti-corruption, or other laws, sanctions, or
regulations, including the U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act 2010, or equivalent local laws. Because the COVID-19 pandemic
has negatively impacted numerous local economies, government intervention in local economies and businesses has increased, which has elevated the risk ofand opportunity for corruption. Any determination that our operations or activities are not in compliance with applicable laws or regulations, particularly thoserelated to anti-corruption and international economic or trade sanctions, could result in investigations, interruption of business, loss of business partner
relationships, suspension or termination of licenses and permits (our own or those of our partners), imposition of fines, legal or equitable sanctions, negative
publicity, and management distraction or departure. Further, our continued compliance with applicable anti-corruption, economic and trade sanctions, or otherlaws or regulations, our Code of Conduct, Code of Ethics for Senior Financial Officers, and our other policies could result in higher operating costs, delays, oreven competitive disadvantages.
Fluctuations in foreign currency exchange rates relative to the U.S. dollar could have a material adverse effect on our financial results.
The global scope of our business means that foreign currency rate fluctuations relative to the U.S. dollar influence our financial results. In many markets
outside the United States, we sell our products and pay for some goods, services, and talent primarily in local currencies. Because our foreign currency
revenues exceed our foreign currency expense, we have a net exposure to changes in the value of the U.S. dollar relative to those currencies. Over time, ourreported financial results will be hurt by a stronger U.S. dollar and will be benefited by a weaker one. We do not attempt to hedge all of our foreign currency
exposure. We attempt to hedge a portion of our foreign currency exposure through the use of foreign currency derivatives or other means; however, even in
those cases, we do not fully eliminate our foreign currency exposure. For details on how foreign exchange affects our business, see “Item 7A. Quantitative andQualitative Disclosures about Market Risk - Foreign currency exchange rate risk.”
Legal and Regulatory Risks
National and local governments may adopt regulations or undertake investigations that could limit our business activities or increase our costs.
Our business is subject to extensive regulatory requirements regarding production, exportation, importation, marketing and promotion, labeling,
distribution, pricing, and trade practices, among others. Changes in laws, regulatory measures, or governmental policies, or the manner in which current ones
are interpreted, could cause us to incur material additional costs or liabilities and jeopardize the growth of our business in the affected market. Specifically,
governments may prohibit, impose, or increase limitations on advertising and promotional activities, or times or locations where beverage alcohol may be soldor consumed, or adopt other measures that could limit our opportunities to reach consumers or sell our products. Certain countries historically have banned all
television, newspaper, magazine, and digital commerce/advertising for beverage alcohol products. Increases in regulation of this nature could substantiallyreduce consumer awareness of our products in the affected markets and make the introduction of new products more challenging.
Additional regulation in the United States and other countries addressing climate change, use of water, and other environmental issues could increase ouroperating costs. Increasing regulation of fuel emissions could increase the cost of energy, including fuel, required to operate our facilities or transport anddistribute our products, thereby substantially increasing the production, distribution, and supply chain costs associated with our products.
Tax increases and changes in tax rules could adversely affect our financial results.
Our business is sensitive to changes in both direct and indirect taxes. New tax rules, accounting standards, or pronouncements, and changes ininterpretation of existing rules, standards, or pronouncements could have a material adverse effect on our business and financial results. As a multinational
company based in the United States, we are more exposed to the impact of changes in U.S. tax legislation and regulations than most of our major competitors,
especially those that affect the effective corporate income tax rate. For example, tax proposals sponsored by the current U.S. presidential administration could
lead to U.S. tax changes, including significant increases to the U.S. corporate income tax rate and the minimum tax rate on certain earnings of foreignsubsidiaries. While we are unable to predict whether any of these changes will ultimately be enacted, if these or similar proposals are enacted into law, they
could negatively impact our effective tax rate and reduce net earnings.
At the global level, potential changes in tax rules or the interpretation of tax rules arising out of the Base Erosion and Profit Shifting project initiated by
the Organization for Economic Co-operation and Development include increased residual profit allocations to market jurisdictions and the implementation of a
global minimum tax rate. It is possible that the adoption of22

these or other proposals could have a material impact on our net income and cash flows. Furthermore, changes in the earnings mix or applicable foreign tax
laws could also negatively impact our effective tax rates.
Our business operations are also subject to numerous duties or taxes that are not based on income, sometimes referred to as “indirect taxes.” These
indirect taxes include excise taxes, sales or value-added taxes, property taxes, payroll taxes, import and export duties, and tariffs. Increases in or the impositionof new indirect taxes on our operations or products would increase the cost of our products or materials used to produce our products or, to the extent levied
directly on consumers, make our products less affordable, which could negatively affect our financial results by reducing purchases of our products andencouraging consumers to switch to lower-priced or lower-taxed product categories. As governmental entities look for increased sources of revenue, they may
increase taxes on beverage alcohol products. In fiscal 2022, we have observed excise tax increases in Turkey, France, Finland, Romania, and the annual
Australian increase tied to the consumer price index, while we also note that Brazil enacted an excise tax decrease. Additionally, during fiscal 2022, Australia isconsidering proposals to change the country’s overall beverage alcohol tax policies.
Our ability to market and sell our products depends heavily on societal attitudes toward drinking and governmental policies that both flow from and affectthose attitudes.
Increased social and political attention has been directed at the beverage alcohol industry. For example, there remains continued attention focused largely
on public health concerns related to alcohol abuse, including drunk driving, underage drinking, and the negative health impacts of the abuse and misuse ofbeverage alcohol. While most people who drink enjoy alcoholic beverages in moderation, it is commonly known and well reported that excessive levels or
inappropriate patterns of drinking can lead to increased risk of a range of health conditions and, for certain people, can result in alcohol dependence. Someacademics, public health officials, and critics of the alcohol industry in the United States, Europe, and other parts of the world continue to seek governmental
measures to make beverage alcohol more expensive, less available, or more difficult to advertise and promote. If future scientific research indicates morewidespread serious health risks associated with alcohol consumption – particularly with moderate consumption – or if for any reason the social acceptability of
beverage alcohol declines significantly, sales of our products could be adversely affected.
Significant additional labeling or warning requirements or limitations on the availability of our products could inhibit sales of affected products.
Various jurisdictions have adopted or may seek to adopt significant additional product labeling or warning requirements or impose limitations on theavailability of our products relating to the content or perceived adverse health consequences of some of our products. Several such labeling regulations or laws
require warnings on any product with substances that the jurisdiction lists as potentially associated with cancer or birth defects. Our products already raise
health and safety concerns for some regulators, and heightened requirements could be imposed. For example, in 2020 in Australia and New Zealand, afterconcerted campaigning from advocacy groups, the government legislated mandatory pregnancy warning labels to be applied to alcohol beverages with atransition period of three years. Additionally, in February 2021, the European Union published its Europe Beating Cancer Plan. As part of the plan, by the endof 2023, the European Union will issue a proposal for mandatory health warnings on beverage alcohol product labels. Such campaigns could result in
additional governmental regulations concerning the production, marketing, labeling, or availability of our products, any of which could damage our reputation,
make our premium brands unrecognizable, or reduce demand for our products, which could adversely affect our profitability. If additional or more severe
requirements of this type are imposed on one or more of our major products under current or future health, environmental, or other laws or regulations, they
could inhibit sales of such products. Further, we cannot predict whether our products will become subject to increased rules and regulations, which, if enacted,
could increase our costs or adversely impact sales.
Counterfeiting or inadequate protection of our intellectual property rights could adversely affect our business prospects.
Our brand names, trademarks, and related intellectual property rights are critical assets, and our business depends on protecting them online and in the
countries where we do business. We may not succeed in protecting our intellectual property rights in a given market or in challenging those who infringe ourrights or imitate or counterfeit our products. Although we believe that our intellectual property rights are legally protected in the markets where we do business,
the ability to register and enforce intellectual property rights varies from country to country. In some countries, for example, it may be more difficult tosuccessfully stop counterfeiting or look-alike products, either because the law is inadequate or, even though satisfactory legal options may exist, it may bedifficult to obtain and enforce sanctions against counterfeiters. We may not be able to register our trademarks in every country where we want to sell aparticular product, and we may not obtain favorable decisions by courts or trademark offices.
Many global spirits brands, including some of our brands, experience problems with product counterfeiting and other forms of trademark infringement.
We combat counterfeiting by working with other companies in the spirits industry through23

our membership in the Alliance Against Counterfeit Spirits (AACS) and with brand owners in other industries via our membership in React, an anticounterfeiting network organization. While we believe AACS and React are effective organizations, they are not active in every market, and their efforts are
subject to obtaining the cooperation of local authorities and courts in the markets where they are active. Despite the efforts of AACS, React, and our own
teams, lower-quality and counterfeit products that could be harmful to consumers could reach the market and adversely affect our intellectual property rights,
brand equity, corporate reputation, and financial results. In addition, the industry as a whole could suffer negative effects related to the manufacture, sale, andconsumption of illegally produced beverage alcohol. In connection with the COVID-19 pandemic and its resulting economic impacts, a reduction ingovernment actions and interventions in local economies and businesses may create an elevated risk of, and opportunity for, counterfeiting.
Litigation and legal disputes could expose our business to financial and reputational risk.
Major private or governmental litigation challenging the production, marketing, promotion, distribution, or sale of beverage alcohol or specific brands
could affect our ability to sell our products. Because litigation and other legal proceedings can be costly to defend, even actions that are ultimately decided in
our favor could have a negative impact on our business reputation or financial results. Lawsuits have been brought against beverage alcohol companies alleging
problems related to alcohol abuse, negative health consequences from drinking, problems from alleged marketing or sales practices, and underage drinking.
While these lawsuits have been largely unsuccessful in the past, others may succeed in the future. We could also experience employment-related or
cybersecurity-related class actions, environmental claims, commercial disputes, product liability actions stemming from a beverage or container production
defect, a whistleblower suit, or other major litigation that could adversely affect our business results, particularly if there is negative publicity.
Governmental actions around the world to enforce trade practice, anti-money-laundering, anti-corruption, competition, tax, environmental, and other laws
are also a continuing compliance risk for global companies such as ours. In addition, as a U.S. public company, we are exposed to the risk of securities-relatedclass action suits, particularly following a precipitous drop in the share price of our stock. Adverse developments in major lawsuits concerning these or othermatters could result in management distraction and have a material adverse effect on our business.
Risks Related to Cybersecurity and Data Privacy
A cyber breach, a failure or corruption of one or more of our key information technology systems, networks, processes, associated sites, or service
providers, or a failure to comply with personal data protection laws could have a material adverse impact on our business.
We rely on information technology (IT) systems, networks, and services, including internet sites, data hosting and processing facilities and tools,
hardware (including laptops and mobile devices), software, and technical applications and platforms, some of which are managed, hosted, provided, or used bythird parties or their vendors, to help us manage our business. The various uses of these IT systems, networks, and services include: hosting our internal
network and communication systems; ordering and managing materials from suppliers; billing and collecting cash from our customers; supply/demandplanning; inventory planning; production; shipping products to customers; paying our employees; hosting corporate strategic plans and employee data; hosting
our branded websites and marketing products to consumers; collecting and storing data on suppliers, customers, consumers, stockholders, employees, former
employees, and beneficiaries of employees or former employees; processing transactions; summarizing and reporting results of operations; hosting, processing,and sharing confidential and proprietary research, business plans, and financial reporting and information; complying with regulatory, legal, or tax
requirements; providing data security; and handling other processes necessary to manage our business.
Increased IT security threats and more sophisticated cybercrimes and cyberattacks, including computer viruses and other malicious codes, ransomware,unauthorized access attempts, denial of service attacks, phishing, social engineering, hacking, and other types of attacks, pose a risk to the security andavailability of our IT systems, networks, and services, including those that are managed, hosted, provided, or used by third parties, as well as theconfidentiality, availability, and integrity of our data and the data of our customers, partners, consumers, employees, stockholders, suppliers, and others. As aresult of the COVID-19 pandemic, a greater number of our employees are working remotely and accessing our technology infrastructure remotely, whichfurther increases our attack surface. For example, in July 2020, we discovered a data breach incident involving malware and related behaviors that resulted inunauthorized access to our IT networks.
Unauthorized access to our IT network or that of our service providers could result in failure of our IT systems, networks, or services to function properly.
This could lead to the loss or unauthorized disclosure of our business strategy or other sensitive information; interruptions in our ability to manage operations;and reputational, competitive, or business harm, which may adversely affect our business operations or financial results. In addition, such IT disruptions could
result in unauthorized disclosure of material confidential information, resulting in financial and reputational damage because of lost or

24

misappropriated confidential information belonging to us or to our partners, customers, consumers, employees, or former employees and their beneficiaries,
stockholders, suppliers, or others.
As a result of any cyber breach or IT disruption, we could also be required to spend significant financial and other resources to remedy the damage. Those
expenditures could include repairing or replacing networks and IT systems, which could require a significant amount of time and financial investment;
responding to claims from employees, former employees, stockholders, suppliers, customers, consumers, or others; handling related litigation or governmental
inquiries; or paying significant fines to regulatory agencies. Furthermore, a cyber breach at any one of our suppliers, customers, or other direct or indirectbusiness partners could have similar impacts. Any cyber breach or IT disruption could have a material adverse effect on our business.
In the ordinary course of our business, we receive, process, transmit, and store information relating to identifiable individuals (personal data), primarily
employees and former employees, but also relating to beneficiaries of employees or former employees, customers, and consumers. As a result, we are subject tovarious U.S. federal and state and foreign laws and regulations relating to personal data in various jurisdictions around the world. These laws change
frequently, and new legislation in this area may be enacted in other jurisdictions at any time. Such laws and regulations include the California Consumer
Protection Act, the California Privacy Rights Act, which will take effect on January 1, 2023, and the European Union General Data Protection Regulation(GDPR). These types of laws and regulations subject us to, among other things, additional costs and expenses and may require costly changes to our businesspractices and security systems, policies, procedures, and practices. Improper disclosure of personal data in violation of personal data protection laws, including
the GDPR, could harm our reputation, cause loss of consumer confidence, subject us to government enforcement actions (including fines), or result in private
litigation against us, which could result in loss of revenue, increased costs, liability for monetary damages, fines, or criminal prosecution, all of which could
negatively affect our business and operating results.
Risks Related to Our Ownership and Corporate Governance Structure
The Brown family has the ability to control the outcome of matters submitted for stockholder approval.
We are a “controlled company” under New York Stock Exchange rules. Controlled companies are exempt from New York Stock Exchange listing
standards that require a board composed of a majority of independent directors, a fully independent nominating/corporate governance committee, and a fully
independent compensation committee. We avail ourselves of the exemptions from having a board composed of a majority of independent directors and a fully
independent nominating/corporate governance committee. Notwithstanding the available exemption, our Compensation Committee is composed exclusively of
independent directors. As a result of our use of some “controlled company” exemptions, our corporate governance practices differ from those of non-controlled
companies, which are subject to all of the New York Stock Exchange corporate governance requirements.
We have two classes of common stock. Our Class A common stock is entitled to full voting powers, including in the elections of directors, while ourClass B common stock may not vote except as provided by the laws of Delaware. We have had two classes of common stock since 1959, when ourstockholders approved the issuance of two shares of Class B non-voting common stock to every holder of our voting common stock. Such dual-class sharestructures have increasingly come under the scrutiny of major indices, institutional investors, and proxy advisory firms, with some calling for thereclassification of nonvoting common stock.
A majority of our voting stock is controlled by members of the Brown family, and, collectively, they have the ability to control the outcome ofstockholder votes, including the election of all of our directors and the approval or rejection of any merger, change of control, or other significant corporatetransactions. We believe that having a long-term-focused, committed, and engaged stockholder base provides us with a distinct strategic advantage, particularly
in a business with aged products and multi-generational brands. This advantage could be eroded or lost, however, should Brown family members cease,collectively, to be controlling stockholders of the Company.
We believe that it is in the interests of all stockholders that we remain independent and family-controlled, and we believe the Brown familystockholders share these interests. Thus, our common stock dual-class share structure, as it has existed since 1959, is perpetual, and we do not have a sunset
provision in our Restated Certificate of Incorporation or By-laws that provides for the eventual reclassification of the non-voting common stock to voting
common stock. However, the Brown family's interests may not always be aligned with other stockholders' interests. By exercising their control, the Brown
family could cause the Company to take actions that are at odds with the investment goals or interests of institutional, short-term, non-voting, or other noncontrolling investors, or that have a negative effect on our stock price. Further, because the Brown family controls the majority of our voting stock, BrownForman might be a less attractive takeover target, which could adversely affect the market price of both our voting and our non-voting common stock. And thedifference in voting rights for our common

25stock could also adversely and disproportionately affect the value of our Class B non-voting common stock to the extent that investors view, or any potential
future purchaser of our Company views, the superior voting rights and control represented by the Class A common stock to have value.
Item 1B. Unresolved Staff Comments
None.

26

Item 2. Properties
Our company-owned production facilities include distilleries, a winery, bottling plants, an RTD canning plant, warehousing operations, sawmills,
cooperages, visitors' centers, and retail shops. We also have agreements with other parties for contract production in Australia, Belgium, China, Finland,
Ireland, Latvia, Mexico, the Netherlands, New Zealand, South Africa, the United Kingdom, and the United States.
In addition to our company-owned production locations and our corporate offices in Louisville, Kentucky, we lease office space for use in our sales,
marketing, and administrative operations in the United States and in over 50 other cities around the world. The lease terms expire at various dates and are
generally renewable. We believe that our facilities are in good condition and are adequate for our business.

Location
United States:
Louisville, Kentucky

Lynchburg, Tennessee
Woodford County, Kentucky
Windsor, California
Trinity, Alabama
Clifton, Tennessee
Stevenson, Alabama
Jackson, Ohio
International:
Cour-Cheverny, France
Amatitán, Mexico
Slane, Ireland
Aberdeenshire, Scotland
Morayshire, Scotland
Newbridge, Scotland
Portsoy, Scotland

Principal Activities

Principal Properties

Notes

Corporate offices
Distilling, bottling, warehousing
Visitors' center
Cooperage
Distilling, bottling, warehousing
Visitors' center
Distilling, bottling, warehousing
Visitors' center
Vineyards, winery, bottling, warehousing
Visitors' center
Cooperage
Stave and heading mill
Stave and heading mill
Stave and heading mill

Includes several renovated historic structures
Home of Old Forester

Distilling, bottling, warehousing
Distilling, bottling, warehousing, RTD canning
Visitors' center
Distilling
Visitors' center
Distilling, warehousing
Visitors' center
Distilling, warehousing
Visitors' center
Bottling
Distilling, warehousing
Visitors' center

Home of Chambord
Home of Herradura and el Jimador

27

Brown-Forman CooperageHome of Jack Daniel'sHome of Woodford Reserve
Home of Sonoma-Cutrer
Jack Daniel Cooperage

Land is leased from a third party

Home of Slane Irish Whiskey
Home of Glendronach
Home of BenriachHome of Glenglassaugh

Item 3. 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 suits will have,individually or in the aggregate, a material adverse effect on our financial position, results of operations, or liquidity.
Item 4. Mine Safety Disclosures
Not applicable.

28

PART II
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
Our Class A and Class B common stock is traded on the New York Stock Exchange under the symbols “BFA” and “BFB,” respectively. As of May 31,
2022, there were 1,899 holders of record of Class A common stock and 3,885 holders of record of Class B common stock. Because of overlapping ownership
between classes, as of May 31, 2022, we had only 5,029 distinct common stockholders of record.
Stock Performance Graph
The graph below compares the cumulative total shareholder return of our Class B common stock for the last five fiscal years with the Standard & Poor's(S&P) 500 Index, the Dow Jones U.S. Consumer Goods Index, and the Dow Jones U.S. Food & Beverage Index. The information presented assumes an initialinvestment of $100 on April 30, 2017, and that all dividends were reinvested. The graph shows the value that each of these investments would have had on
April 30 in the years since 2017.

Brown-Forman Corporation
S&P 500 Total Return Index
Dow Jones U.S. Consumer Goods Index
Dow Jones U.S Food & Beverage Index

2017
$100
$100
$100
$100

2018
$153
$113
$98
$97

2019
$147
$129
$109
$111

Item 6. [Reserved]

29

2020
$174
$130
$109
$110

2021
$215
$189
$169
$138

2022
$195
$190
$175
$156

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Introduction
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader better understandBrown-Forman, our operations, our financial results, and our current business environment. Please read this MD&A in conjunction with our Consolidated
Financial Statements and the accompanying Notes contained in “Item 8. Financial Statements and Supplementary Data” (the Consolidated Financial
Statements).
Our MD&A is organized as follows:
Table of Contents
Presentation basis
Significant developments
Executive summary
Results of operations
Liquidity and capital resources
Critical accounting policies and estimates

Page
30
34
36
38
45
46

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 expenses2; and (h) organic operating income. To calculate these measures, we adjust, as applicable, for (1) acquisitions anddivestitures, (2) foreign exchange, (3) impairment charges, and (4) a commitment to our charitable foundation. 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 toour acquisitions and divestitures (e.g., transaction, transition, and integration costs or income), 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 theeffects 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, whichowns Part Time Rangers RTDs. See Note 12 to the Consolidated Financial Statements for more information.
This adjustment removes (a) transaction and integration costs related to the acquisitions and divestitures, (b) the gain on sale of Early Times, Canadian
Mist, and Collingwood and related assets, (c) operating activity for the non-comparable period for Early Times, Canadian Mist, and Collingwood, which isactivity 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 isprimarily activity in the first two quarters of fiscal 2022. We believe that these adjustments allow for us to better understand our organic results on acomparable basis.

•

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

30

trend both positively and negatively. (In this report, “dollar” always means the U.S. dollar unless stated otherwise.) To eliminate the effect of foreignexchange fluctuations when comparing across periods, we translate current-year results at prior-year rates and remove transactional and hedging foreignexchange 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. During the fourth quarterof fiscal 2022, we recognized a non-cash impairment charge of $52 million for our Finlandia brand name. See “Critical Accounting Policies andEstimates” below and Note 14 to the Consolidated Financial Statements for more information.We believe that these adjustments allow for us to better
understand our organic results on a comparable basis.

•“Foundation.” During the fourth quarter of fiscal 2021, we committed $20 million to the Brown-Forman Foundation (the Foundation) to support thecommunities where our employees live and work. This adjustment removes the $20 million commitment to the Foundation from our organic SG&A
expenses and organic operating income to present our organic results on a comparable basis.

We use the non-GAAP measure “organic change”, along with other metrics, to: (a) understand our performance from period to period on a consistentbasis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e)communicate our financial performance to the Board of Directors, stockholders, and investment community. We provide reconciliations of the “organic
change” in certain line items of the statements of operations to their nearest GAAP measures in the tables under “Results of Operations - Fiscal 2022
Highlights” and “Results of Operations - Year-Over-Year 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 historicalfinancial performance and comparability between periods.
As of the third quarter ended January 31, 2022, we changed certain non-GAAP financial measures that we have historically used. We no longer report“underlying changes” in certain measures of the statements of operations; instead, we now report “organic change” for certain measures of the statements ofoperations. “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 ofchanges in distributor inventories on changes in certain line items of the statements of operations. This change to our non-GAAP financial measures was inresponse to comments from and discussions with the Staff of the Securities and Exchange Commission.
Although we no longer provide non-GAAP financial measures that adjust for “estimated net change in distributor inventories,” we still believe that our
results are affected by changes in distributor inventories, particularly in our largest market, the United States, where the spirits industry is subject to regulations
that essentially mandate a so-called “three-tier system,” with a value chain that includes suppliers, distributors and retailers. Accordingly, we continue toprovide information concerning fluctuations in distributor inventories. We believe such information is useful in understanding our performance and trends as itprovides relevant information regarding customers’ demand for our products.
“Return on average invested capital.” This measure refers to the sum of net income and after-tax interest expense, divided by average invested capital. Average
invested capital equals assets less liabilities, excluding interest-bearing debt, and is calculated using the average of the most recent 13 month-end balances.
After-tax interest expense equals interest expense multiplied by one minus our effective tax rate. We use this non-GAAP measure because we consider it to be ameaningful indicator of how effectively and efficiently we invest capital in our business.
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 tostage 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 Market Highlights,” we provide supplemental information for our largest markets ranked by percentage of total
fiscal 2022 net sales. In addition to markets listed by country name, we include the following aggregations:31•“Developed International” markets are “advanced economies” as defined by the IMF, excluding the United States. In fiscal 2022, our largest developed
international markets were Germany, Australia, the United Kingdom, and France. This aggregation represents our net sales of branded products to thesemarkets.

•“Emerging” markets are “emerging and developing economies” as defined by the IMF. In fiscal 2022, our largest emerging markets were Mexico, Poland,Brazil, Russia, and Chile. This aggregation represents our net sales of branded products to these markets.

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

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

Brand Aggregations.
In “Results of Operations - Fiscal 2022 Brand Highlights,” we provide supplemental information for our largest brands ranked by percentage of total
fiscal 2022 net sales. In addition to brands 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 ofbrands (Old Forester), GlenDronach, Benriach, Glenglassaugh, Slane Irish Whiskey, and Coopers’ Craft.
•“American whiskey” includes the Jack Daniel’s family of brands and premium bourbons (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’sSingle Barrel Collection (JDSB), Jack Daniel’s Tennessee Rye Whiskey (JDTR), Jack Daniel’s Sinatra Select, Jack Daniel’s Bonded, Jack
Daniel’s No. 27 Gold Tennessee Whiskey, Jack Daniel’s Bottled-in-Bond, Jack Daniel’s 10 Year Old, and Jack Daniel’s Triple Mash.
•••“Jack Daniel’s RTD and RTP” products include all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Cola, Jack Daniel’s
Country Cocktails, Jack Daniel’s Double Jack, and other malt- and spirit-based Jack Daniel’s RTDs along with Jack Daniel’s Winter Jack
RTP.

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

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

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

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

•“Vodka” includes Finlandia.

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

Other Metrics.
•“Shipments.” We generally record revenues when we ship or deliver our products to our customers. In this report, unless otherwise specified, we refer toshipments 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) where Brown-Forman is the distributor, shipments directly to retail or wholesale customers or (b) where Brown-Forman is not the distributor,
shipments from distributor customers to retailers and wholesalers. 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 thatrefers to the purchase of product by consumers from retail outlets, including products purchased through e-commerce channels, as measured by volume orretail sales value. This information is provided by32third parties, such as Nielsen and the National Alcohol Beverage Control Association (NABCA). Our estimates of market share or changes in market shareare derived from consumer takeaway data using the retail sales value metric. We believe consumer takeaway is a leading indicator of consumer demand
trends.
•“Estimated net change in distributor inventories.” We generally recognize revenue when our products are shipped or delivered to customers. In the UnitedStates 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.
33

Significant Developments
Below we discuss the significant developments in our business during fiscal 2021 and fiscal 2022. These developments relate to the COVID-19 pandemic(COVID-19), supply chain disruptions, Russia’s invasion of Ukraine, innovation, and capital deployment.
COVID-19
We experienced strong, broad-based reported net sales growth across all of our geographic clusters and Travel Retail channel due to the gradual reopening 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 incertain economies around the world, and the post-pandemic economic recovery positively impacted our results when compared to the same prior-year period.
We further discuss the effect of COVID-19 on our results where relevant below.
Supply Chain Disruptions
Our results were negatively impacted by supply chain disruptions, largely related to glass supply. These disruptions curtailed our ability to fully meetdemand and therefore negatively affected our net sales. Additionally, we incurred higher input and transportation costs due to the supply chain disruptions. We
further discuss the effect of supply chain disruptions on our results where relevant below.
Russia’s Invasion of Ukraine
Russia’s invasion of Ukraine, which began in February 2022, had a negative effect on our fiscal 2022 operating results. The most significant effect was
the $52 million non-cash impairment charge for our Finlandia brand name (see Note 4 to the Consolidated Financial Statements for more information), whichreflects a decline in our long-term outlook for Finlandia due to the suspension of operations in Russia, a key market for the brand. Additionally, operating
income was negatively affected by other items attributable to the conflict such as (a) the suspension of our commercial operations in Russia and our diminishedability to conduct business in Ukraine, (b) bad debt expense, (c) inventory write-offs, and (d) severance expense. These negative effects were partially offset by
the gain on terminated Russian ruble hedge contracts.
Although reported net sales were negatively affected by the suspension of our commercial operations in Russia and our diminished ability to conductbusiness in Ukraine as a result of the conflict, the overall impact was not material to our consolidated full-year reported net sales growth rate, because (a)Russia and Ukraine represent a small share of total reported net sales and (b) the impact occurred in the fourth quarter of the fiscal year. Prior to the onset of theconflict, Russia and Ukraine represented approximately 2% of our reported net sales. We expect the conflict to have a more significant negative effect on our
fiscal 2023 reported net sales results, reflecting a full-year impact of the suspension of commercial operations in Russia, and the ongoing disruption of ourbusiness in Ukraine. We further discuss the effect of the conflict on our fiscal 2022 results where relevant below.
Innovation••

Jack Daniel’s family of brands. Innovation within the Jack Daniel’s family of brands has contributed to our growth in the last two years as described below.
◦

In fiscal 2021 and fiscal 2022, we continued the international launch of Jack Daniel’s Tennessee Apple, expanding to certain developed internationaland emerging markets.

◦

In fiscal 2021, we introduced new spirit-based RTD products in the United States.

◦

In fiscal 2022, we launched Jack Daniel’s 10 Year Old in the United States.

Tequila brands. Tequila continues to be an attractive category, particularly in the United States, with both Herradura and el Jimador contributing
significantly to our overall net sales growth. In fiscal 2021, we introduced Herradura Legend in the United States.

Capital Deployment•

We have focused our capital deployment initiatives on (a) ensuring adequate liquidity and flexibility during the COVID-19 pandemic, (b) fully investing in
our existing business, (c) continued execution of our acquisitions and divestitures strategy, and (d) returning cash to our stockholders through regular andspecial dividends.

34

•

Investments. During fiscal 2021 and fiscal 2022, our capital expenditures totaled $200 million and focused on enabling the growth of our premium
whiskey brands:◦

During fiscal 2021, a $125 million capital investment was approved by our Board of Directors to expand our bourbon-making capacity in Kentucky tomeet anticipated future consumer demand.

◦

During fiscal 2022, a $50 million capital investment was approved by our Board of Directors to expand our scotch-making capacity to meet
anticipated future consumer demand.

◦

To support the continued growth of JDTW, we built an additional barrel warehouse at our Jack Daniel’s distillery during fiscal 2022.

•

Acquisitions and divestitures. During fiscal 2021, we sold our Early Times, Canadian Mist, and Collingwood brands and related assets. Also in fiscal 2021,
we acquired Part Time Rangers Holdings Limited, which owns Part Time Rangers RTDs. See Note 12 to the Consolidated Financial Statements for more
information.

•

Cash returned to stockholders. During fiscal 2021 and fiscal 2022, we returned $1.2 billion to our stockholders through regular and special dividends.

35

Executive Summary
Fiscal 2022 Highlights•

We delivered reported net sales of $3.9 billion, an increase of 14% compared to fiscal 2021. Reported net sales growth was driven by higher volumes andfavorable price/mix, 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. Organic net sales increased 17% compared to fiscal 2021.
◦

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

◦

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

Supply chain disruptions had an adverse effect on results.
•

We delivered reported operating income of $1.2 billion, an increase of 3% compared to fiscal 2021. The increase in reported operating income was driven
by reported net sales growth and the absence of the $20 million commitment to the Foundation in fiscal 2021, partially offset by (a) the effect ofacquisitions and divestitures (primarily the fiscal 2021 gain on sale of Early Times, Canadian Mist, and Collingwood), (b) impairment charges, and (c) the
negative effect of foreign exchange. Organic operating income increased 27% compared to fiscal 2021.

•

We delivered diluted earnings per share of $1.74, a decrease of 7% compared to fiscal 2021, due to higher income taxes, partially offset by an increase inreported operating income. Earnings per share in fiscal 2021 included an estimated $0.20 per share benefit from the gain on sale of Early Times, Canadian
Mist, and Collingwood and related assets.

•

Our return on average invested capital decreased to 17.7% in fiscal 2022, compared to 19.6% in fiscal 2021, driven primarily by higher income taxes.
Return on average invested capital in fiscal 2021 benefited from the gain on sale of Early Times, Canadian Mist, and Collingwood and related assets.

36

Summary of Operating Performance Fiscal 2021 and Fiscal 2022
2021

Fiscal year ended April 30

2021 vs. 2022

2022

Reported Change

Organic Change1

Net sales
Cost of sales
Gross profit
Advertising
SG&A
Gain on sale of business
Other expense (income), net
Operating income

$
$
$
$
$
$
$
$

3,461
1,367
2,094
399
671
(127)
(15)
1,166

$
$
$
$
$
$
$
$

3,933
1,542
2,391
438
690
—
59
1,204

14 %
13 %
14 %
10 %
3%
nm
nm
3%

17 %
18 %
17 %
11 %
7%
n/a
nm
27 %

Total operating expenses2

$

1,055

$

1,187

13 %

8%

60.5 %
33.7 %

60.8 %
30.6 %

0.3 pp(3.1 pp)79$
16.5 %
1.88$
19.6 %

77
24.8 %
1.74
17.7 %(4 %)8.3 pp(7 %)(1.9 pp)

As a percentage of net sales
Gross profit
Operating income

3Interest expense, net
Effective tax rate
Diluted earnings per share
Return on average invested capital1$$

See “Non-GAAP Financial Measures” above for details on our use of “organic change” and “return on average invested capital,” including how we calculate these measures andwhy we think this information is useful to readers.
2
Operating expenses include advertising expense, SG&A expense, and other expense (income), net.
3
Year-over-year changes in percentages are reported in percentage points (pp).
137

Results of Operations
Fiscal 2022 Market Highlights
The following table shows net sales results for our largest markets, summarized by geographic area, for fiscal 2022 compared to fiscal 2021. We discuss
results of the markets most affecting our performance below the table.
Top Markets
Net Sales % Change vs. 2021

1

Geographic area
United States
Developed International
Germany
Australia
United Kingdom
FranceRest of Developed International
Emerging
MexicoPolandBrazilRussiaChile
Rest of Emerging
Travel RetailNon-branded and bulk
Total

% of Fiscal
2022 Net
Sales

Reported

49 %
29 %
6%
6%
6%
4%
8%
18 %
5%
3%
2%
1%
1%
7%
3%
2%
100 %

10 %
12 %
11 %
5%
7%
(1 %)
32 %
24 %
19 %
9%
22 %
7%
64 %
34 %
65 %
6%
14 %

Acquisitions
andDivestitures
2%
—%
—%
—%
—%
—%
2%
—%
—%
—%
—%
—%
—%
—%
2%
18 %
2%

Foreign
Exchange
—%
4%
3%
2%
9%
3%
3%
5%
(4 %)
4%
(1 %)
6%
—%
15 %
1%
1%
2%

Organic2
12 %
16 %
14 %
7%
15 %
2%
37 %
29 %
15 %
13 %
21 %
13 %
64 %
49 %
67 %
25 %
17 %

Note: Results may differ due to rounding
1

See “Definitions” above for definitions of market aggregations presented here.
See “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 thisinformation is useful to readers.

2

Reported net sales for some of the markets discussed below were positively impacted by comparisons against COVID-19-related declines during fiscal
2021. See “Significant Developments - COVID-19” above for more information on the impact of COVID-19 on our results.
The United States, our most important market, grew reported net sales 10%, led by (a) JDTW, fueled by higher volumes and a favorable channel mix
shift to the on-premise channel; (b) our premium bourbons, due to higher volumes and prices of Woodford Reserve and Old Forester; (c) our tequilas, driven byhigher volumes of Herradura and el Jimador; and (d) volumetric growth of 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. Supply chain
disruptions had an adverse effect on results.
Developed International•

Germany’s reported net sales increased 11%, fueled by volumetric gains of JDTW and JD RTDs, partially offset by the negative effect of foreignexchange.

•

Australia’s reported net sales increased 5%, driven primarily by higher pricing of JD RTDs, partially offset by the negative effect of foreign exchange.

38

•

The United Kingdom’s reported net sales increased 7%, led by volumetric growth of JDTW, 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 32%, fueled by JDTW growth in Spain, Japan, and Korea, partially offset by thenegative effect of foreign exchange. An estimated net increase in distributor inventories positively impacted reported net sales. Supply chain disruptions
had an adverse effect on results.

Emerging•

Mexico’s reported net sales increased 19%, driven by broad-based growth across our portfolio of brands, led by Herradura and JDTW, along with thepositive effect of foreign exchange. Supply chain disruptions had an adverse effect on results.

•

Poland’s reported net sales increased 9%, led by JDTW and Finlandia, partially offset by the negative effect of foreign exchange. Supply chain disruptions
had an adverse effect on results.

•

Brazil’s reported net sales increased 22%, fueled by the launch of JDTA, favorable price/mix of JDTW, and higher volumes of JDTH. Supply chain
disruptions had an adverse effect on results.

•

Russia’s reported net sales increased 7%, led by the launch of JDTA and higher pricing of Finlandia, partially offset by the negative effect of foreignexchange. Our fiscal 2022 reported net sales were adversely impacted by the suspension of our commercial operations in Russia due to Russia’s invasionof Ukraine. Our fiscal 2023 outlook reflects the expected impact of a full-year suspension of our commercial operations in Russia.

•

Chile’s reported net sales increased 64%, driven by broad-based growth across much of our portfolio, led by higher volumes of JDTW and the launch of
JDTA. Supply chain disruptions had an adverse effect on results.

•

Reported net sales in the Rest of Emerging increased 34%, driven primarily by JDTW gains, led by Turkey, Romania, and the United Arab Emirates. This
growth was partially offset by the negative effect of foreign exchange (reflecting the strengthening of the dollar primarily against the Turkish lira). An
estimated net increase in distributor inventories positively impacted reported net sales.

Travel Retail reported net sales increased 65%, fueled by higher volumes across much of our portfolio, led by JDTW, as we cycled against significant declines
during the same prior-year period, partially offset by unfavorable price/mix.
Non-branded and bulk reported net sales increased 6%, driven by higher volumes for used barrels.

39

Fiscal 2022 Brand Highlights
The following table highlights the global results of our largest brands for fiscal 2022 compared to fiscal 2021. We discuss results of the brands mostaffecting our performance below the table.
Major Brands
Net Sales % Change vs. 2021
Product category / brand family/ brand1
Whiskey
Jack Daniel’s family of brands
JDTW
JD RTD/RTP
JDTH
Gentleman Jack
JDTF
JDTA
Other Jack Daniel’s whiskey
brandsWoodford Reserve
Rest of Whiskey
TequilaHerradura
el Jimador
Rest of Tequila
Wine
Vodka (Finlandia)
Rest of Portfolio
Non-branded and bulk

Reported

Acquisitions &Divestitures

Foreign
Exchange

Organic2

13 %
15 %
20 %
6%
—%
(3 %)
16 %
44 %

2%
—%
—%
—%
—%
—%
—%
—%

2%
3%
4%
1%
2%
2%
(2 %)
2%

18 %
17 %
23 %
7%
2%
—%
13 %
46 %

17 %
16 %
(10 %)
22 %
29 %
27 %
6%
6%
21 %
10 %
6%

—%
—%
37 %
—%
—%
—%
—%
—%
—%
(2 %)
18 %

2%
—%
1%
(2 %)
(1 %)
(1 %)
(3 %)
—%
2%
14 %
1%

19 %
16 %
28 %
20 %
28 %
27 %
3%
6%
23 %
22 %
25 %

Note: Results may differ due to rounding

See “Definitions” above for definitions of brand aggregations and volume measures presented here.
See “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 thisinformation is useful to readers.

12Reported net sales for some of the brands discussed below were positively impacted by comparisons against COVID-19-related declines during fiscal
2021. See “Significant Developments - COVID-19” above for more information on the impact of COVID-19 on our results.
Whiskey•

The Jack Daniel's family of brands grew reported net sales 15%, driven by the broad-based growth of JDTW.
•

JDTW generates a significant percentage of our total net sales and is our top priority. Reported net sales increased 20%, driven 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.
An estimated net increase in distributor inventories positively impacted reported net sales. This growth was partially offset by the negative effect offoreign exchange. Supply chain disruptions had an adverse effect on results.

•

Jack Daniel's RTD/RTP grew reported net sales 6%, driven primarily by Australia and Germany.

•

Reported net sales for JDTH were flat, as broad-based gains in our international markets were offset by declines in the United States and the negative
effect of foreign exchange. Supply chain disruptions had an adverse effect on results.

40

•

JDTF grew reported net sales 16%, led by growth in emerging markets along with the positive effect of foreign exchange. An estimated net increasein distributor inventories positively impacted reported net sales. Supply chain disruptions had an adverse effect on results.

•

JDTA grew reported net sales 44%, fueled by the continued international launch in our emerging markets, most notably in Chile and Brazil, alongwith volumetric gains in the United States. An estimated net increase in distributor inventories positively impacted reported net sales.

•

Other Jack Daniel’s whiskey brands grew reported net sales 17%, largely driven by higher volumes in the United States reflecting the April 2022
inventory build in advance of the launch of Jack Daniel’s Bonded and Jack Daniel’s Triple Mash.

•

Woodford Reserve’s reported net sales increased 16%, fueled by higher volumes and prices in the United States along with volumetric gains in Travel
Retail. Supply chain disruptions had an adverse effect on results.

•

Rest of Whiskey reported net sales declined 10% due to the effect of acquisitions and divestitures, partially offset by growth of Old Forester, BenRiach,and GlenDronach. An estimated net increase in distributor inventories positively impacted reported net sales.

Tequila•Herradura’s reported net sales increased 29%, fueled by growth in the United States and Mexico.

•

el Jimador’s reported net sales increased 27%, driven by broad-based volume growth led by the United States, Colombia, and Mexico.

Wine reported net sales increased 6%, driven primarily by higher volumes of Sonoma-Cutrer due to the reopening of the on-premise channel in the UnitedStates. An estimated net increase in distributor inventories positively impacted reported net sales.
Vodka (Finlandia) reported net sales increased 21% led by broad-based growth in emerging markets. Russia and Ukraine are key markets for Finlandia. Our
fiscal 2023 outlook reflects the expected impact of a full-year suspension of our commercial operations in Russia and the ongoing impact on our ability to
conduct business in Ukraine.
Rest of Portfolio reported net sales increased 10%, largely driven by the growth of Chambord in the United Kingdom and United States, partially offset by thenegative effect of foreign exchange.
Non-branded and bulk. See discussion for this aggregation in “Results of Operations - Fiscal 2022 Market Highlights” above.

41

Year-Over-Year ComparisonsCommentary below compares fiscal 2022 to fiscal 2021 results. A comparison of fiscal 2021 to fiscal 2020 results may be found in “Part II, Item 7,
Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year endedApril 30, 2021 (2021 Form 10-K).
Reported net sales for some markets and brands were positively impacted by comparisons against COVID-19-related declines during fiscal 2021. See“Significant Developments - COVID-19” above for more information.
Net Sales
2022
Price/mix

VolumePercentage change versus the prior fiscal year ended April 30
Change in reported net sales
Acquisitions and divestitures
Foreign exchange
Change in organic net sales

7%
3%
—%
9%

Total
7 %
(1 %)
2%
8%

14 %
2%
2%
17 %

Note: Results may differ due to rounding

Reported net sales of $3.9 billion increased 14%, or $472 million, in fiscal 2022 compared to fiscal 2021. Reported net sales growth was driven byhigher volumes and favorable price/mix, partially offset by the negative effect of foreign exchange and the effect of acquisitions and divestitures. An estimatednet increase in distributor inventories positively impacted reported net sales. Volume growth was driven by the Jack Daniel’s family of brands, led by JDTW,
JD RTDs, and JDTA. Favorable price/mix was driven by faster growth from our higher-priced brands, led by JDTW, and a favorable channel mix shift due tothe continued re-opening of the on-premise channel. Supply chain disruptions had an adverse effect on results. See “Results of Operations - Fiscal 2022 Market
Highlights” and “Results of Operations - Fiscal 2022 Brand Highlights” above for details on the factors contributing to the change in reported net sales forfiscal 2022.
Cost of Sales

2022
Cost/mix

VolumePercentage change versus the prior fiscal year ended April 30
Change in reported cost of sales
Acquisitions and divestitures
Foreign exchange
Change in organic cost of sales

7%
3%
—%
9%

Note: Results may differ due to rounding

Total
6%
1%
2%
8%

13 %
3%
2%
18 %

Reported cost of sales of $1.5 billion increased $175 million, or 13%, in fiscal 2022 compared to fiscal 2021. 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 driven by the Jack Daniel’s family of brands, led by JDTW, JD RTDs,
and JDTA. Unfavorable cost/mix reflects (a) a shift in portfolio mix toward our higher-cost brands, (b) higher costs related to supply chain disruptions, (c)higher input costs related to grain and agave, and (d) inventory write-offs attributable to the impacts of Russia’s invasion of Ukraine.

42

Gross Profit
Percentage change versus the prior fiscal year ended April 30
Change in reported gross profit
Acquisitions and divestitures
Foreign exchange
Change in organic gross profit

2022
14 %
1%
3%
17 %

Note: Results may differ due to rounding

Gross Margin
Fiscal year ended April 30
Prior year gross margin
Price/mix
Cost/mix
Acquisitions and divestitures
Foreign exchange
Change in gross margin
Current year gross margin2022
60.5 %
1.3 %(1.3 %)
0.5 %(0.2 %)
0.3 %
60.8 %

Note: Results may differ due to rounding

Reported gross profit of $2.4 billion increased $297 million, or 14%, in fiscal 2022 compared to fiscal 2021. Gross margin increased to 60.8% in fiscal
2022, up 0.3 percentage points from 60.5% in fiscal 2021. The increase in gross margin was driven primarily by favorable price/mix and the effect ofacquisitions and divestitures, largely offset by unfavorable cost/mix.
Operating Expenses
Percentage change versus the prior fiscal year ended April 30
2022

ReportedAdvertising
SG&A
Total operating expenses1
Note: Results may differ due torounding

1

Foundation

Impairment

Foreign
Exchange

Organic

10 %

—%

—%

2%

11 %

3%
13 %

3%
2%

—%
(6 %)

1%
(1 %)

7%
8%

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

Reported operating expenses totaled $1.2 billion and increased $132 million, or 13%, in fiscal 2022 compared to fiscal 2021.
•

Reported advertising expenses increased 10% in fiscal 2022, driven primarily by higher spend in our developed international and emerging markets to
support JDTW and the continued launch of JDTA.

•

Reported SG&A expenses increased 3% in fiscal 2022, driven primarily by (a) comparison to lower discretionary spend during fiscal 2021 due to
COVID-19, (b) higher compensation and benefit-related expenses, and (c) expenses attributable to the impacts of Russia’s invasion of Ukraine. This
increase in spend was partially offset by the absence of the $20 million commitment to the Foundation in fiscal 2021 and the positive effect of foreignexchange.

43

Operating Income
Percentage change versus the prior fiscal year ended April 30
Change in reported operating income
Acquisitions and divestitures
Foundation
Impairment charges
Foreign exchange
Change in organic operating income

2022
3%
14 %
(2 %)
6%
6%
27 %

Note: Results may differ due to rounding

Reported operating income was $1.2 billion in fiscal 2022, an increase of $38 million, or 3%, compared to fiscal 2021. Operating margin declined 3.1
percentage points to 30.6% in fiscal 2022 from 33.7% in fiscal 2021 driven by (a) the effect of acquisitions and divestitures (primarily the fiscal 2021 gain onsale of Early Times, Canadian Mist, and Collingwood and related assets), (b) unfavorable cost/mix, (c) impairment charges (primarily the non-cash impairment
charge for our Finlandia brand name), and (d) the negative effect of foreign exchange. These factors were partially offset by (a) favorable price/mix, (b)operating expense (excluding impairment charges) leverage, and (c) the absence of the $20 million commitment to the Foundation in fiscal 2021.
Interest expense (net) decreased $2 million, or 4%, in fiscal 2022 compared to fiscal 2021, due to higher interest income driven by higher interest rates
on our interest-bearing investments.
Our effective tax rate for fiscal 2022 was 24.8% compared to 16.5% in fiscal 2021. The increase in our effective tax rate was driven primarily by (a) the
absence of a deferred tax benefit recognized in the prior-year related to an intercompany transfer of assets, (b) the impact of prior intercompany sales ofinventory taxed at rates higher than current statutory tax rates, (c) increased expense from true-ups of prior-year tax liabilities, tax rate changes and otherpermanent differences; and (d) decreased benefit from stock-based compensation. See Note 11 to the Consolidated Financial Statements for details.
Diluted earnings per share were $1.74 in fiscal 2022, a decrease of 7% compared to fiscal 2021 due to higher income taxes, partially offset by anincrease in reported operating income. Earnings per share in fiscal 2021 included an estimated $0.20 per share benefit from the gain on sale of Early Times,
Canadian Mist, and Collingwood and related assets.
Fiscal 2023 Outlook
Below we discuss our outlook for fiscal 2023 which reflects the trends, developments, and uncertainties, including those described above, we expect toaffect our business. When we provide guidance for organic change in certain measures of the statements of operations we do not provide guidance for thecorresponding GAAP change because the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreignexchange, which could have a significant impact to our GAAP income statement measures.
The company anticipates continued growth in fiscal 2023 despite global macroeconomic and geopolitical uncertainties. Accordingly, we expect thefollowing in fiscal 2023:•

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

•

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

•

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

•

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

•

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

44

Liquidity and Capital Resources
We generate strong cash flows from operations, which enable us to meet current obligations, fund capital expenditures, and return cash to ourstockholders through regular dividends and, from time to time, through share repurchases and special dividends. We believe our investment-grade credit ratings(A1 by Moody's and A- by Standard & Poor's) provide us with financial flexibility when accessing global debt capital markets and allow us to reserve adequate
debt capacity for investment opportunities and unforeseen events.
Our cash flow from operations is supplemented by our cash and cash equivalent balances, as well as access to other liquidity sources. Cash and cash
equivalents were $1,150 million at April 30, 2021, and $868 million at April 30, 2022. As of April 30, 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 use, together with our cash flow from operations, to fund our short-term operational needs.
See Note 6 to the Consolidated Financial Statements for outstanding commercial paper balances, interest rates, and days to maturity at April 30, 2021 andApril 30, 2022. The average balances, interest rates, and original maturities during the periods ended April 30, 2021 and 2022, are presented below.
(Amounts in millions)Three Months Average

Fiscal Year Average

April 30,

April 30,

2021
Average commercial paper$

259

Average interest rate

0.23 %

Average days to maturity at issuance

72

2022
$

—
—%
0

2021
$

321

2022
$

59

0.49 %

0.16 %

116

32

Our commercial paper program is supported by available commitments under our $800 million bank credit facility. The credit facility, which was
extended for an additional year in November 2021, is scheduled to expire in November 2024. At April 30, 2022, there were no borrowings outstanding under
the credit facility. Although unlikely, under extreme market conditions, one or more participating banks may not be able to fund its commitments under ourcredit facility. To manage this counterparty credit risk, we partner with banks that have investment grade credit ratings, limit the amount of exposure we havewith each bank, and monitor the financial conditions of each bank.
Our most significant short-term cash requirements relate primarily to funding our operations (such as expenditures for raw materials, production anddistribution, advertising and promotion, and current taxes), repayment of our note maturing in 2023, and capital investments. Our most significant longer-term
cash requirements primarily include payments related to our long-term debt, employee benefit obligations, and deferred tax liabilities (see Notes 6, 9 and 11 to
the Consolidated Financial Statements).
While we expect to meet our planned short-term liquidity needs largely through cash generated from operations and borrowings under our commercial
paper program, a sustained market deterioration resulting in declines in net sales and profit could require us to evaluate alternative sources of liquidity. If wehave additional liquidity needs, we believe that we could access 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.

45

Cash Flow Summary
The following table summarizes our cash flows for each of the last two years:(Dollars in millions)

2021

Cash flows from operating activities
Investing activities:
Proceeds from sale of business
Acquisition of business
Additions to property, plant, and equipment
Other
Net cash flows from investing activities

$

817

$

936

$

177 $
(14)
(62)
(3)
98 $

—
—
(138)
11
(127)

(126) $
(338)
—
(21)
(485) $

(196)
(352)
(479)
(11)
(1,038)$Financing activities:
Net change in short-term borrowings
Regular dividend payments
Special dividend payment
Other
Net cash flows from financing activities

2022

$

$

Cash provided by operations of $936 million increased $119 million from fiscal 2021, reflecting improved operating results and the impact of changes inworking 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 Consolidated Financial Statements for details about the Bacardi matter.)Cash flows from investing activities decreased $127 million during fiscal 2022, compared to an increase of $98 million during the prior year. The $225
million change largely reflects (a) the proceeds of $177 million received in the prior-year period from our divestiture of the Early Times, Canadian Mist, andCollingwood brands and related assets and (b) a $76 million increase in capital expenditures.
Cash used for financing activities was $1,038 million during fiscal 2022, compared to $485 million for fiscal 2021. The $553 million increase largely
reflects a special cash dividend payment of $479 million in December 2021 and a $70 million increase in net repayments of short-term borrowings.
A discussion of our cash flows for fiscal 2021 compared to fiscal 2020 may be found in “Part II, Item 7, Management's Discussion and Analysis ofFinancial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended April 30, 2021.
Dividends
As announced in November 2021, our Board of Directors approved a 5% increase in the quarterly cash dividend on our Class A and Class B common
stock to $0.1885 per share from $0.1795 per share, effective with the regular quarterly dividend paid on December 28, 2021. As a result, the indicated annual
cash dividend increased from $0.7180 per share to $0.7540 per share. The Board also declared a special cash dividend of $1.00 per share on our Class A andClass B common stock, which was paid on December 29, 2021.
As announced on May 26, 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. Stockholders of record on June 8, 2022, will receive the dividend on July 1, 2022.
Critical Accounting Policies and Estimates
Our financial statements reflect some estimates involved in applying the following critical accounting policies that entail uncertainties and subjectivity.
Using different estimates or policies could have a material effect on our operating results and financial condition.

46

Goodwill and Other Intangible Assets
We have obtained most of our brands by acquiring other companies. When we acquire another company, we first allocate the purchase price toidentifiable assets and liabilities, including intangible brand names and trademarks (“brand names”), based on estimated fair value. We then record any
remaining purchase price as goodwill. We do not amortize goodwill or other intangible assets with indefinite lives. We consider all of our brand names to haveindefinite lives.
We assess our goodwill and other indefinite-lived intangible assets for impairment at least annually, or more frequently if circumstances indicate thecarrying amount may be impaired. Goodwill is impaired when the carrying amount of the related reporting unit exceeds its estimated fair value, in which casewe write down the goodwill by the amount of the excess (limited to the carrying amount of the goodwill). We estimate the reporting unit's fair value using
discounted estimated future cash flows or market information. Similarly, a brand name is impaired when its carrying amount exceeds its estimated fair value, inwhich case we write down the brand name to its estimated fair value. We estimate the fair value of a brand name using the “relief from royalty” method. We
also consider market values for similar assets when available. Considerable management judgment is necessary to estimate fair value, including making
assumptions about future cash flows, net sales, discount rates, and royalty rates.
We have the option, before quantifying the fair value of a reporting unit or brand name, to evaluate qualitative factors to assess whether it is more likely
than not that our goodwill or brand names are impaired. If we determine that is not the case, then we are not required to quantify the fair value. That assessment
also takes considerable management judgment.
Based on our assumptions, we believe none of our goodwill or other intangibles are impaired as of April 30, 2022. Further, we estimate the fair values of
goodwill and other intangible assets substantially exceed their carrying amounts, except for our Finlandia brand name. As of April 30, 2022, the carrying
amount of the Finlandia brand name is $181 million.
During the fourth quarter of fiscal 2022, we recognized a non-cash impairment charge of $52 million for the Finlandia brand name. The impairment
reflects a decline in our long-term outlook for Finlandia due to our suspension of operations in Russia, a key market for the brand. We determined Finlandia’sfair value based on the “relief from royalty” method, using current assumptions. Reasonably possible changes in those assumptions could result in additional
non-cash impairment charges in the future. For example, we estimate that, all else equal, (a) a 15% decline in projected future net sales would result in an
impairment charge of approximately $19 million or (b) a 1 percentage point increase in the discount rate would result in an impairment charge ofapproximately $29 million.
Pension and Other Postretirement Benefits
We sponsor various defined benefit pension plans and postretirement plans providing retiree health care and retiree life insurance benefits. Benefits are
based on factors such as years of service and compensation level during employment. We expense the benefits expected to be paid over employees' expected
service. This requires us to make assumptions to determine the net benefit costs and obligations, such as discount rates, return on plan assets, the rate of salary
increases, expected service, and health care cost trend rates. We review these assumptions annually and modify them based on current rates and trends whenappropriate. The assumptions also reflect our historical experience and management's best judgment regarding future expectations. We believe the discountrates and expected return on plan assets are the most significant assumptions.
The discount rate used to measure the benefit obligations is determined at the beginning of each fiscal year using a yield curve based on the interest rates
of high-quality debt securities with maturities corresponding to the expected timing of our benefit payments. The service cost and interest cost components aremeasured by applying the specific spot rates along that yield curve. The expected return on pension plan assets reflects expected capital market returns for each
asset class that are based on historical returns, adjusted for the expected effects of diversification.
The following table compares the assumed discount rates and expected return on assets used in determining net periodic benefit cost for fiscal 2022 to
those to be used in determining that cost for fiscal 2023.
Medical and Life
Insurance Benefits

Pension Benefits
2022

Discount rate for service cost
Discount rate for interest cost
Expected return on plan assets

2023

3.36 %
2.24 %
6.25 %

2022

4.44 %
3.97 %
6.25 %

2023

3.49 %
2.27 %
n/a

4.50 %
3.96 %
n/a

Using these assumptions, we estimate our pension and other postretirement benefit cost for fiscal 2023 will be approximately $21 million, compared to$28 million (excluding settlement charges) for fiscal 2022. Decreasing/increasing the47

assumed discount rates by 50 basis points would increase/decrease the total fiscal 2023 cost by approximately $6 million. Decreasing/increasing the assumed
return on plan assets by 50 basis points would increase/decrease the total fiscal 2023 cost by approximately $4 million.
Income Taxes
Significant judgment is required in evaluating our tax positions. We establish liabilities when some positions are likely to be challenged and may not
succeed, despite our belief that our tax return positions are fully supportable. We adjust these liabilities in light of changing circumstances, such as the progressof a tax audit. We believe current liabilities are appropriate for all known contingencies, but this situation could change.
Years can elapse before we can resolve a particular matter for which we may have established a tax liability. Although predicting the final outcome or thetiming of resolution of any particular tax matter can be difficult, we believe our liabilities reflect the likely outcome of known tax contingencies. Unfavorable
settlement of any particular issue could require use of our cash and increase our effective tax rate. Conversely, a favorable resolution could result in reduced
cash tax payments, the reversal of previously established liabilities, or some combination of these results, which could reduce our effective tax rate.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Market risks
Our enterprise risk management process is intended to ensure that we take risks knowingly and thoughtfully and that we balance potential risks andrewards. Our integrated enterprise risk management framework is designed to identify, evaluate, communicate, and appropriately mitigate risks across ouroperations.
We face market risks arising from changes in foreign currency exchange rates, commodity prices, and interest rates. We manage market risks throughprocurement strategies as well as the use of derivative and other financial instruments. Our risk management program is governed by policies that authorize andcontrol the nature and scope of transactions that we use to mitigate market risks. Our policy permits the use of derivative financial instruments to mitigate
market risks but prohibits their use for speculative purposes.
Foreign currency exchange rate risk. Foreign currency fluctuations affect our net investments in foreign subsidiaries and foreign currencydenominated cash flows. In general, we expect our cash flows to be negatively affected by a stronger dollar and positively affected by a weaker dollar. Our
most significant foreign currency exposures include the euro, the British pound, and the Australian dollar. We manage our foreign currency exposures throughderivative financial instruments, principally foreign currency forward contracts, and debt denominated in foreign currency. We had outstanding currency
derivatives with notional amounts totaling $1,218 million and $801 million at April 30, 2021 and 2022, respectively.
We estimate that a hypothetical 10% weakening of the dollar compared to exchange rates of hedged currencies as of April 30, 2022, would decrease thefair value of our then-existing foreign currency derivative contracts by approximately $61 million. This hypothetical change in fair value does not consider the
expected inverse change in the underlying foreign currency exposures.
Commodity price risk. Commodity price changes can affect our production and supply chain costs. Our most significant commodities exposures
include wood, corn, agave, malted barley, rye, and natural gas. We manage certain exposures through forward purchase contracts.
Interest rate risk. 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. In addition to currently outstanding debt, any potential future debt offerings would be subject to interest rate risk.
As of April 30, 2022, our cash and cash equivalents ($868 million) were exposed to interest rate changes. Based on the then-existing balances of ourinterest-bearing investments, a hypothetical one percentage point increase in interest rates would result in a negligible decrease in net interest expense.
See Notes 13 and 14 to the Consolidated Financial Statements for details on our foreign currency exchange rate risk. See “Critical Accounting Policies
and Estimates” in “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of our pension and otherpostretirement plans' exposure to interest rate risks. Also see “Item 1A. Risk Factors” for details on how economic conditions affecting market risks also affectthe demand for and pricing of our products and how we are affected by exchange rate fluctuations.

48

Item 8. Financial Statements and Supplementary Data

Table of Contents
Page
Reports of Management

50

Reports of Independent Registered Public Accounting Firms (PCAOB ID 238 and 42)

51

Consolidated Statements of Operations

55

Consolidated Statements of Comprehensive Income

56

Consolidated Balance Sheets

57

Consolidated Statements of Cash Flows

58

Consolidated Statements of Stockholders’ Equity

59

Notes to Consolidated Financial Statements

60

49

Reports of Management
Management’s Responsibility for Financial Statements
Our management is responsible for preparing, presenting, and ensuring the integrity of the financial information presented in this report. The
consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States, including amounts based on
management’s best estimates and judgments. In management’s opinion, the consolidated financial statements fairly present the Company’s financial position,
results of operations, and cash flows.
The Audit Committee of the Board of Directors, comprising only independent directors, meets regularly with our external auditors, the independent
registered public accounting firm Ernst & Young LLP (EY); with our internal auditors; and with representatives of management to review accounting, internal
control structure, and financial reporting matters. Our internal auditors and EY have full, free access to the Audit Committee. As set forth in our Code of
Conduct and Corporate Governance Guidelines, we are firmly committed to adhering to the highest standards of moral and ethical behavior in our businessactivities.
Management’s Report on Internal Control over Financial Reporting
Management is also responsible for establishing and maintaining effective internal control over financial reporting, as defined in Rules 13a-15(f) and15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles
generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
As of the end of our fiscal year, management conducted an assessment of the effectiveness of our internal control over financial reporting based on theframework and criteria in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of April 30, 2022. EY, which
audited and reported on the Company’s consolidated financial statements, has audited the effectiveness of our internal control over financial reporting as ofApril 30, 2022, as stated in their report.
Dated:

June 17, 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

50

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Brown-Forman Corporation
Opinion on the Financial Statements
We have audited the consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows of Brown-Forman Corporationand its subsidiaries (the “Company”) for the year ended April 30, 2020, including the related notes and schedule of valuation and qualifying accounts for theyear ended April 30, 2020 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended April 30, 2020 inconformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due toerror or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis forour opinion.
/s/ PricewaterhouseCoopers LLPLouisville, Kentucky
June 19, 2020
We served as the Company’s auditor from 1933 to 2020.

51

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Brown-Forman Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Brown-Forman Corporation and Subsidiaries (the Company) as of April 30, 2022 and
2021, the related consolidated statement of operations, comprehensive income, stockholders’ equity and cash flows for each of the two years in the period
ended April 30, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at
April 30, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended April 30, 2022, in conformity with
U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's
internal control over financial reporting as of April 30, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committeeof Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated June 17, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial
statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company inaccordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures toassess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Suchprocedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We
believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or
required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved
our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on thecritical audit matter or on the account or disclosures to which it relates.

52

Description of the
MatterValuation of Other Intangible Assets with Indefinite LivesAt April 30, 2022, the balance of the Company’s other intangible assets with indefinite lives was $586 million. As
discussed in Notes 1 and 4 to the consolidated financial statements, other intangible assets with indefinite lives include
intangible brand names and trademarks (“brand names”) and are assessed for impairment at least annually, or more
frequently, if circumstances indicate the carrying amount may be impaired. As described in Note 4, during the fourth
quarter of 2022, the Company recognized an impairment charge of $52 million for its Finlandia brand name. The
Company determined Finlandia’s fair value based on the relief from royalty method.
Auditing management’s estimate of the fair value of brand names was complex due to the significant judgment
required to determine the fair value of the brand names. The fair value estimates were sensitive to significant
assumptions used in the valuation process, such as future net sales. The estimate also includes assumptions such as
discount rates and royalty rates.

How We Addressed
the Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address therisks of material misstatement over the Company’s process to estimate the fair value of other intangible assets withindefinite lives, including controls over management’s review of the selection of assumptions, described above, usedin the valuation model.
To test the estimated fair value of the Company’s brand names, we performed audit procedures that included, among
others, assessing methodologies used in the valuation model and testing the significant assumptions discussed above.
This included comparing the significant assumptions used by management to observable market data, current industry
and economic trends, changes in the Company’s business model and customer base, historical operating results andother relevant factors that would affect the significant assumptions. We assessed management’s historical estimatesand performed sensitivity analyses of assumptions to evaluate the changes in the fair value of the brand names thatwould result from changes in the assumptions. We also involved valuation specialists to assist in evaluating valuation
methodologies and certain assumptions used in the models.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2020.
Louisville, Kentucky
June 17, 2022

53

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Brown-Forman Corporation
Opinion on Internal Control Over Financial Reporting
We have audited Brown-Forman Corporation and Subsidiaries’ internal control over financial reporting as of April 30, 2022, based on criteria establishedin Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO
criteria). In our opinion, Brown-Forman Corporation and Subsidiaries (the Company) maintained, in all material respects, effective internal control overfinancial reporting as of April 30, 2022, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidatedbalance sheets of the Company as of April 30, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity
and cash flows for each of the two years in the period ended April 30, 2022, and the related notes and financial statement schedule listed in the Index at Item
15(a)(2) and our report dated June 17, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectivenessof internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registeredwith the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing andevaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.
/s/ Ernst & Young LLPLouisville, Kentucky
June 17, 2022

54

Brown-Forman Corporation and Subsidiaries
Consolidated Statements of Operations(Dollars in millions, except per share amounts)
2020

Year Ended April 30,

Sales
Excise taxes
Net sales
Cost of sales
Gross profit
Advertising expenses
Selling, general, and administrative expenses
Gain on sale of business
Other expense (income), net
Operating income
Non-operating postretirement expense
Interest income
Interest expense
Income before income taxes
Income taxes
Net income
Earnings per share:
Basic
Diluted

$

2021

$

4,526 $
1,065
3,461
1,367
2,094
399
671
(127)
(15)
1,166
6
(2)
81
1,081
178
903 $

5,081
1,148
3,933
1,542
2,391
438
690
—
59
1,204
13
(5)
82
1,114
276
838

$
$

1.73
1.72

1.89
1.88

1.75
1.74

$
$

The accompanying notes are an integral part of the consolidated financial statements.

55

2022

4,306 $
943
3,363
1,236
2,127
383
642
—
11
1,091
5
(5)
82
1,009
182
827 $

$
$

Brown-Forman Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income(Dollars in millions)2020

Year Ended April 30,

Net income
Other comprehensive income (loss), net of tax:
Currency translation adjustments
Cash flow hedge adjustments
Postretirement benefits adjustments
Net other comprehensive income (loss)
Comprehensive income

2021

$

827

$

$

(94)
30
(77)
(141)
686 $

The accompanying notes are an integral part of the consolidated financial statements.

56

2022

903

$

838

123
(76)
78
125
1,028 $

(60)
53
77
70
908

Brown-Forman Corporation and Subsidiaries
Consolidated Balance Sheets(Dollars in millions)
2021

April 30,

AssetsCash and cash equivalents
Accounts receivable, net
Inventories:
Barreled whiskey
Finished goods
Work in process
Raw materials and supplies
Total inventories
Other current assets
Total current assets
Property, plant, and equipment, net
Goodwill
Other intangible assets
Deferred tax assets
Other assets$$

Total assets
Accounts payable and accrued expenses
Accrued income taxes
Short-term borrowings
Current portion of long-term debt
Total current liabilities
Long-term debt
Deferred tax liabilities
Accrued pension and other postretirement benefits
Other liabilities
Total liabilities
Commitments and contingencies

Liabilities

$

2022
1,150
753

$

868
813

1,101
323
199
128
1,751
263

1,155
312
225
126
1,818
277

3,917
832
779
676
70
248
6,522

3,776
875
761
586
74
301
6,373

679
34
205
—
918
2,354
169
219
206
3,866

$
$

703
81
—
250
1,034
2,019
219
183
181
3,636

25
47
3,243
(422)
(237)
2,656
6,522 $

25
47
3,242
(352)
(225)
2,737
6,373

Stockholders’ Equity

Common stock:
Class A, voting, $0.15 par value (170,000,000 shares authorized; 170,000,000 shares issued)
Class B, nonvoting, $0.15 par value (400,000,000 shares authorized; 314,532,000 shares issued)
Retained earnings
Accumulated other comprehensive income (loss), net of tax
Treasury stock, at cost (5,803,000 and 5,511,000 shares in 2021 and 2022, respectively)
Total stockholders' equity
Total liabilities and stockholders' equity$

The accompanying notes are an integral part of the consolidated financial statements.

57

Brown-Forman Corporation and Subsidiaries
Consolidated Statements of Cash Flows(Dollars in millions)2020

Year Ended April 30,

Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operations:
Gain on sale of business
Asset impairment charges
Depreciation and amortization
Stock-based compensation expense
Deferred income tax provision (benefit)
Other, net
Changes in assets and liabilities, net of business acquisitions and dispositions:
Accounts receivable
Inventories
Other current assets
Accounts payable and accrued expenses
Accrued income taxes
Other operating assets and liabilities
Cash provided by operating activities
Cash flows from investing activities:
Proceeds from sale of business
Acquisition of business, net of cash acquired
Additions to property, plant, and equipment
Other, net
Cash provided by (used for) investing activities
Cash flows from financing activities:
Proceeds from short-term borrowings, maturities greater than 90 days
Repayments of short-term borrowings, maturities greater than 90 days
Net change in short-term borrowings
Payments of withholding taxes related to stock-based awards
Acquisition of treasury stock
Dividends paid
Cash used for financing activities
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of period
Cash, cash equivalents,and restricted cash at end of period
Less: Restricted cash (included in other current assets) at end of period
Cash and cash equivalents at end of period
Supplemental disclosure of cash paid for:
Interest
Income taxes

$

2021

827

$

903

$

838

—
13
74
11
39
15

(127)
—
77
12
(53)
(23)

—
61
79
15
(11)
31

12
(203)
(27)
(30)
18
(25)
724

(150)
(37)
31
137
8
39
817

(77)
(93)
15
37
47
(6)
936

—
(22)
(113)
(6)
(141)

177
(14)
(62)
(3)
98

—
—
(138)
11
(127)

$

—
—
178
(43)
(1)
(325)
(191)
(24)
368
307
675
—
675 $

344
(516)
46
(21)
—
(338)
(485)
45
475
675
1,150
—
1,150 $

—
—
(196)
(11)
—
(831)
(1,038)
(47)
(276)
1,150
874
(6)
868

$
$

83
143

79
204

80
226

$
$

The accompanying notes are an integral part of the consolidated financial statements.

58

2022

$
$

Brown-Forman Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity(Dollars in millions, except per share amounts)

Balance at April 30, 2019
Reclassification of tax effects1
Net income
Net other comprehensive income (loss)
Cash dividends ($0.6806 per share)
Acquisition of treasury stock
Stock-based compensation expense
Stock issued under compensation plans
Loss on issuance of treasury stock issued undercompensation plans
Balance at April 30, 2020
Net income
Net other comprehensive income (loss)
Cash dividends ($0.7076 per share)
Acquisition of treasury stock
Stock-based compensation expense
Stock issued under compensation plans
Loss on issuance of treasury stock issued undercompensation plans
Balance at April 30, 2021
Net income
Net other comprehensive income (loss)
Cash dividends ($1.7360 per share)
Acquisition of treasury stock
Stock-based compensation expense
Stock issued under compensation plans
Loss on issuance of treasury stock issued undercompensation plans
Balance at April 30, 2022

Class A
Common StockClass B
Common Stock

Additional
Paid-in Capital

$

$

$

25

47

—

Retained
Earnings

$

2,238
43
827

AOCI

$

Treasury Stock

(363)

(43)

$

(300)

Total

$

(141)
(325)
(1)
11
43
25

(11)
—

47

(75)
2,708
903

(547)

(86)
1,975
903
125
(338)
—
12
21

(258)

125
(338)
—
12
21
25

(12)
—

47

(30)
3,243
838

(422)

(42)
2,656
838
70
(831)
—
15
12

(237)

70
(831)
—
15
12
$

25

$

47

$

(15)
—

$

(8)
3,242

$

(352)

$

(225)

$

1Reflects adoption of Accounting Standards Update No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI), effective May 1, 2019.

The accompanying notes are an integral part of the consolidated financial statements.

59

1,647
—
827
(141)
(325)
(1)
11
43

(23)
2,737

Brown-Forman Corporation and Subsidiaries
Notes to Consolidated Financial Statements(Dollars and other currency amounts in millions, except per share data)
1. Accounting Policies
We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP). We also
apply the following accounting policies when preparing our consolidated financial statements:
Principles of consolidation. Our consolidated financial statements include the accounts of all subsidiaries in which we have a controlling financial
interest. We eliminate all intercompany transactions.
Estimates. To prepare financial statements that conform with GAAP, our management must make informed estimates that affect how we report revenues,
expenses, assets, and liabilities, including contingent assets and liabilities. Actual results could differ from these estimates.
Cash equivalents. Cash equivalents include bank demand deposits and all highly liquid investments with original maturities of three months or less.
Accounts receivable. Accounts receivable are recorded net of an allowance for expected credit losses (allowance for doubtful accounts). We determine theallowance using information such as customer credit history and financial condition, historical loss experience, and macroeconomic factors. We write off
account balances against the allowance when we have exhausted our collection efforts. The allowance for doubtful accounts was $7 and $13 at April 30, 2021
and 2022, respectively.
Inventories. Inventories are valued at the lower of cost or net realizable value. Approximately 52% of our consolidated inventories are valued using thelast-in, first-out (LIFO) cost method, which we use for the majority of our U.S. inventories. We value the remainder of our inventories primarily using the firstin, first-out (FIFO) cost method. FIFO cost approximates current replacement cost. If we had used the FIFO method for all inventories, they would have been$353 and $385 higher than reported at April 30, 2021 and 2022, respectively.
Because we age most of our whiskeys in barrels for three years or more, we bottle and sell only a portion of our whiskey inventory each year. Following
industry practice, we classify all barreled whiskey as a current asset. We include warehousing, insurance, ad valorem taxes, and other carrying charges
applicable to barreled whiskey in inventory costs.
We classify agave inventories, bulk tequila, bulk wine, and liquid in bottling tanks as work in process.
Property, plant, and equipment. We state property, plant, and equipment at cost less accumulated depreciation. We calculate depreciation on a straight-line
basis using our estimates of useful life, which are 20–40 years for buildings and improvements; 3–10 years for machinery, equipment, vehicles, furniture, andfixtures; and 3–7 years for capitalized software.
We assess our property, plant, and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of those assets
may not be recoverable. When we do not expect to recover the carrying value of an asset (or asset group) through undiscounted future cash flows, we write it
down to its estimated fair value. We determine fair value using discounted estimated future cash flows, considering market values for similar assets whenavailable.
When we retire or dispose of property, plant, and equipment, we remove its cost and accumulated depreciation from our balance sheet and reflect any
gain or loss in operating income. We expense the costs of repairing and maintaining our property, plant, and equipment as we incur them.
Goodwill and other intangible assets. We have obtained most of our brands by acquiring other companies. When we acquire another company, we firstallocate the purchase price to identifiable assets and liabilities, including intangible brand names and trademarks (“brand names”), based on estimated fairvalue. We then record any remaining purchase price as goodwill. We do not amortize goodwill or other intangible assets with indefinite lives. We consider allof our brand names to have indefinite lives.
We assess our goodwill and other indefinite-lived intangible assets for impairment at least annually, or more frequently if circumstances indicate thecarrying amount may be impaired. Goodwill is impaired when the carrying amount of the related reporting unit exceeds its estimated fair value, in which casewe write down the goodwill by the amount of the excess (limited to the carrying amount of the goodwill). We estimate the reporting unit's fair value using
discounted estimated future cash flows or market information. Similarly, a brand name is impaired when its carrying amount exceeds its estimated fair value, inwhich case we write down the brand name to its estimated fair value. We estimate the fair value of a brand name using the “relief from royalty” method. We
also consider market values for similar assets when available. Considerable management judgment is60

necessary to estimate fair value, including the selection of assumptions about future cash flows, net sales, discount rates, and royalty rates.
We have the option, before quantifying the fair value of a reporting unit or brand name, to evaluate qualitative factors to assess whether it is more likely
than not that our goodwill or brand names are impaired. If we determine that is not the case, then we are not required to quantify the fair value. That assessment
also takes considerable management judgment.
Revenue recognition. Our net sales predominantly reflect global sales of beverage alcohol consumer products. We sell these products under contracts withdifferent types of customers, depending on the market. The customer is most often a distributor, wholesaler, or retailer.
Each contract typically includes a single performance obligation to transfer control of the products to the customer. Depending on the contract, control istransferred when the products are either shipped or delivered to the customer, at which point we recognize the transaction price for those products as net sales.
The transaction price recognized at that point reflects our estimate of the consideration to be received in exchange for the products. The actual amount may
ultimately differ due to the effect of various customer incentives and trade promotion activities. In making our estimates, we consider our historical experienceand current expectations, as applicable. Subsequent adjustments recognized for changes in estimated transaction prices are typically not material.
Net sales exclude taxes we collect from customers that are imposed by various governments on our sales, and are reduced by payments to customers
unless made in exchange for distinct goods or services with fair values approximating the payments. Net sales include any amounts we bill customers forshipping and handling activities related to the products. We recognize the cost of those activities in cost of sales during the same period in which we recognize
the related net sales. Sales returns, which are permitted only in limited situations, are not material. Customer payment terms generally range from 30 to 90
days. There are no significant amounts of contract assets or liabilities.
Cost of sales. Cost of sales includes the costs of receiving, producing, inspecting, warehousing, insuring, and shipping goods sold during the period.
Advertising costs. We expense the production costs of advertising when the advertisements first take place. We expense all other advertising costs during
the year in which the costs are incurred.
Selling, general, and administrative expenses. Selling, general, and administrative expenses include the costs associated with our sales force,
administrative staff and facilities, and other expenses related to our non-manufacturing functions.
Stock-based compensation. We use stock-based awards as part of our incentive compensation for eligible employees and directors. We recognize thegrant-date fair value of an award as compensation expense on a straight-line basis over the requisite service period, which typically corresponds to the vesting
period for the award. Upon forfeiture of an award prior to vesting, we reverse any previously-recognized compensation expense related to that award. We
classify stock-based compensation expense within selling, general, and administrative expenses.
As we recognize compensation expense for a stock-based award, we concurrently recognize a related deferred tax asset. The subsequent vesting or
exercise of the award will generally result in an actual tax benefit that differs from the deferred tax asset that had been recorded. The excess (deficiency) of theactual tax benefit over (under) the previously recorded tax asset is recognized as income tax benefit (expense) on the date of vesting or exercise.
Income taxes. We base our annual provision for income taxes on the pre-tax income reflected in our consolidated statement of operations. We establish
deferred tax liabilities or assets for temporary differences between GAAP and tax reporting bases and later adjust them to reflect changes in tax rates expected
to be in effect when the temporary differences reverse. We record a valuation allowance as necessary to reduce a deferred tax asset to the amount that we
believe is more likely than not to be realized. We do not provide deferred income taxes on undistributed earnings of foreign subsidiaries that we expect toindefinitely reinvest. We record a deferred tax charge in prepaid taxes for the difference between GAAP and tax reporting bases with respect to the eliminationof intercompany profit in ending inventory.
We assess our uncertain income tax positions in two steps. First, we evaluate whether the tax position will more likely than not, based on its technicalmerits, be sustained upon examination, including resolution of any related appeals or litigation. For a tax position that does not meet this first criterion, we
recognize no tax benefit. For a tax position that does meet the first criterion, we recognize a tax benefit in an amount equal to the largest amount of benefit that
we believe has more than a 50% likelihood of being realized upon ultimate resolution. We record interest and penalties on uncertain tax positions as income tax
expense.

61

Foreign currency transactions and translation. We report all gains and losses from foreign currency transactions (those denominated in a currency otherthan the entity's functional currency) in current income. The U.S. dollar is the functional currency for most of our consolidated entities. The local currency is
the functional currency for some of our consolidated foreign entities. We translate the financial statements of those foreign entities into U.S. dollars, using theexchange rate in effect at the balance sheet date to translate assets and liabilities, and using the average exchange rate for the reporting period to translate
income and expenses. We record the resulting translation adjustments in other comprehensive income (loss).
2. Balance Sheet Information
Supplemental information on our year-end balance sheets is as follows:
April 30,

2021

Other current assets:
Prepaid taxes
Other

$
$

Property, plant, and equipment:
Land
Buildings
Equipment
Construction in process$

Accumulated other comprehensive income (loss), net of tax:
Currency translation adjustments
Cash flow hedge adjustments
Postretirement benefits adjustments

$
$

155
122
277

$

$

$

86
660
849
129
1,724
849
875

$

172

$

218

$

202
96
70
139
507
679

$

200
99
74
112
485
703

(179) $
(16)(227)(422) $

(239)
37
(150)
(352)

$

$

62

170
93
263
82
659
833
50
1,624
792
832

Less accumulated depreciation
Accounts payable and accrued expenses:
Accounts payable, trade
Accrued expenses:
Advertising, promotion, and discounts
Compensation and commissions
Excise and other non-income taxes
Other

2022

3. 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:
2020

Net income available to common stockholders
Share data (in thousands):
Basic average common shares outstanding
Dilutive effect of stock-based awards
Diluted average common shares outstanding$

Basic earnings per share
Diluted earnings per share

$
$

2021

827

$

903

477,7652,644
480,409
1.73
1.72

2022

$

478,5272,150
480,677
$
$

1.89
1.88

838
478,879
1,686
480,565

$
$

1.75
1.74

We excluded common stock-based awards for approximately 301,000 shares, 234,000 shares, and 691,000 shares from the calculation of diluted earnings
per share for 2020, 2021, and 2022, respectively, because they were not dilutive for those periods under the treasury stock method.
4. Goodwill and Other Intangible Assets
The following table shows the changes in goodwill (which include no accumulated impairment losses) and other intangible assets over the past two
years:
Other Intangible
AssetsGoodwill

Balance as of April 30, 2020
Sale of business (Note 12)
Acquisition of business (Note 12)
Foreign currency translation adjustment
Balance as of April 30, 2021
Foreign currency translation adjustment
Impairment
Balance as of April 30, 2022

$

$

756 $
(4)
8
19
779
(18)
—
761 $

635
(1)
8
34
676
(38)
(52)
586

Our other intangible assets consist of trademarks and brand names, all with indefinite useful lives.
During the fourth quarter of fiscal 2022, we recognized a non-cash impairment charge for our Finlandia brand name. The impairment reflects a decline in
our long-term outlook for Finlandia due to our suspension of operations in Russia, a key market for the brand. The impairment charge of $52 is included in“other expense (income), net” in the accompanying consolidated statement of operations. As of April 30, 2022, the remaining carrying amount of the Finlandia
brand name was $181.

63

5. 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 are recorded as of April 30, 2022.
In May 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), which then expired according to its terms on April 30, 2020. Following delivery of our notice and upon expiration of the Agreement, Bacardi
claimed that it was entitled to compensation under the principle of commercial agency in the U.K., as well as additional compensation for the winding up ofbusiness conducted under the Agreement and for remitting the associated funds owed to us. Based on that claim, which we disputed, Bacardi withheld over £50
owed to us (included in accounts receivable in the accompanying consolidated balance sheet as of April 30, 2021). The dispute was resolved in December
2021, with Bacardi remitting over £47 related to this matter.
6. Debt and Credit Facilities
Our long-term debt (net of unamortized discounts and issuance costs) consisted of:2021

April 30,

2.25% senior notes, $250 principal amount, due January 15, 2023
3.50% senior notes, $300 principal amount, due April 15, 2025
1.20% senior notes, €300 principal amount, due July 7, 2026
2.60% senior notes, £300 principal amount, due July 7, 2028
4.00% senior notes, $300 principal amount, due April 15, 2038
3.75% senior notes, $250 principal amount, due January 15, 2043
4.50% senior notes, $500 principal amount, due July 15, 2045$

Less current portion
$

2027.

2022

249
298
362
415
294
248
488
2,354
—
2,354

$

$

250
298
315
374
295
248
489
2,269
250
2,019

Debt payments required over the next five fiscal years consist of $250 in 2023, $0 in 2024, $300 in 2025, $0 in 2026, $316 in 2027, and $1,427 after

The senior notes contain terms, events of default, and covenants customary of these types of unsecured securities, including limitations on the amount of
secured debt we can issue.
Our short-term borrowings of $205 as of April 30, 2021, included $195 of borrowings under our commercial paper program. There were no borrowings
under that program as of April 30, 2022.
April 30,

2021

2022

Commercial paper
Average interest rate
Average remaining days to maturity

$195
0.16%

$—
—%
0

24

We have a committed revolving credit agreement with various U.S. and international banks for $800 that expires in November 2024. At April 30, 2022,
there were no borrowings outstanding under this facility.

647. Common Stock
The following table shows the change in outstanding common shares during each of the last three years:
Class A

(Shares in thousands)

Balance at April 30, 2019
Acquisition of treasury stock
Stock issued under compensation plans
Balance at April 30, 2020
Acquisition of treasury stock
Stock issued under compensation plans
Balance at April 30, 2021
Acquisition of treasury stock
Stock issued under compensation plans

Class B

168,999(13)
54
169,040—70
169,110—65
169,175

Balance at April 30, 2022

Total

308,173(3)
999
309,169—450
309,619—226
309,845477,172(16)
1,053
478,209—520
478,729—291
479,020

8. Net Sales
The following table shows our net sales by geography:
2020

United States
Developed International1
Emerging2
Travel Retail3
Non-branded and bulk4

$

2021

1,690
901
572
125
75
3,363

$

$

2022

1,748
1,014
578
63
58
3,461

$

$

1,917
1,137
714
104
61
3,933

$

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 in fiscal 2022 were Germany, Australia, the United Kingdom, and France.
2
Represents net sales of branded products to “emerging and developing economies” as defined by the IMF. Our largest emerging markets in fiscal 2022 were Mexico, Poland,Brazil, Russia, and Chile.
3
Represents net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military regardless of customer location.
4
Includes net sales of used barrels, contract bottling, and bulk whiskey and wine, regardless of customer location.
1

The following table shows our net sales by product category:
2020

Whiskey1Tequila2
Wine3
Vodka4
Non-branded and bulk5
Rest of portfolio

$

$

2021

2,671
275
186
109
75
47
3,363

$

$

2022

2,744
299
206
90
58
64
3,461

$

$

3,110
364
219
109
61
70
3,933

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 familyof 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, and other tequilas.
3
Includes Korbel Champagne and Sonoma-Cutrer wines.
4
Includes Finlandia.
5
Includes net sales of used barrels, contract bottling, and bulk whiskey and wine.
165

9. Pension and Other Postretirement Benefits
We sponsor various defined benefit pension plans as well as postretirement plans providing retiree health care and retiree life insurance benefits. Below,
we discuss our obligations related to these plans, the assets dedicated to meeting the obligations, and the amounts we recognized in our financial statements asa result of sponsoring these plans.
Obligations. We provide eligible employees with pension and other postretirement benefits based on factors such as years of service and compensationlevel during employment. The pension obligation shown below (“projected benefit obligation”) consists of: (a) benefits earned by employees to date based on
current salary levels (“accumulated benefit obligation”); and (b) benefits to be received by employees as a result of expected future salary increases. (Theobligation for medical and life insurance benefits is not affected by future salary increases.) The following table shows how the present value of our projected
benefit obligations changed during each of the last two years.
Medical and Life
Insurance Benefits

Pension Benefits
2021

Obligation at beginning of year
Service cost
Interest cost
Net actuarial loss (gain)1
Retiree contributions
Benefits paid
Obligation at end of year
1

$

2022

1,005 $
26
25
9
—
(53)
1,012 $

$

2021

2022

1,012 $
26
22
(132)
—
(82)
846 $

51 $
1
1
(1)
1
(4)
49 $

49
1
1
(5)
1
(4)
43

The net actuarial loss (gain) during each year was primarily attributable to changes in discount rates.

Service cost represents the present value of the benefits attributed to service rendered by employees during the year. Interest cost is the increase in thepresent value of the obligation due to the passage of time. Net actuarial loss (gain) is the change in value of the obligation resulting from experience different
from that assumed or from a change in an actuarial assumption. (We discuss actuarial assumptions used at the end of this note.) Plan amendments may alsochange the value of the obligation.
As shown in the previous table, the change in the value of our pension and other postretirement benefit obligations also includes the effect of benefit
payments and retiree contributions. Expected benefit payments (net of retiree contributions) over the next 10 years are as follows:
Medical and Life
Insurance Benefits

Pension Benefits

2023
2024
2025
2026
2027
2028 – 2032

$

64
61
60
61
62
312

$

3
3
3
3
3
16

Assets. We invest in specific assets to fund our pension benefit obligations. Our investment goal is to earn a total return that, over time, will grow assets
sufficiently to fund our plans' liabilities, after providing appropriate levels of contributions and accepting prudent levels of investment risk. To achieve thisgoal, plan assets are invested primarily in funds or portfolios of funds managed by outside managers. Investment risk is managed by company policies that
require diversification of asset classes, manager styles, and individual holdings. We measure and monitor investment risk through quarterly and annual
performance reviews, and through periodic asset/liability studies.
Asset allocation is the most important method for achieving our investment goals and is based on our assessment of the plans' long-term return objectives
and the appropriate balances needed for liquidity, stability, and diversification. As of April 30, 2022, our target asset allocation is a mix of 40% public equity
investments, 47% fixed income investments, and 13% alternative investments.

66

The following table shows the fair value of pension plan assets by category as of the end of the last two years. (Fair value levels are defined in Note 14.)
Level 1

Level 2

Level 3

Total

April 30, 2021

Equity securities
Limited partnership interest1

$

103
—
103

$

$
$

—
—
—

$
$

—
2
2

$

103
2
105

Investments measured at net asset value:
Commingled trust funds2:
Equity funds
Fixed income funds
Real estate funds
Short-term investments
Limited partnership interests3

266
357
65
8
35

Total

$

836

$

78
2

April 30, 2022

Equity securities
Limited partnership interest1

$

78
—
78

$

$
$

—
—
—

$
$

—
2
2

80

Investments measured at net asset value:
Commingled trust funds2:
Equity funds
Fixed income funds
Real estate funds
Short-term investments
Limited partnership interests3

218
318
78
6
41
$

Total

741

This limited partnership interest was initially valued at cost and has been adjusted to fair value as determined in good faith by management of the partnership using various
factors, and does not meet the requirements for reporting at the net asset value (NAV). The valuation requires significant judgment due to the absence of quoted market prices
and the inherent lack of liquidity. This limited partnership has a term expiring in September 2022, although this period may be extended.
2
Commingled trust fund valuations are based on the NAV of the funds as determined by the fund administrators and reviewed by us. NAV represents the underlying assets
owned by the fund, minus liabilities and divided by the number of shares or units outstanding. Generally, for commingled trust funds other than real estate, redemptions are
permitted daily with no notice period. The real estate fund is redeemable quarterly with 110 days' notice.
3
These limited partnership interests were initially valued at cost and have been adjusted using NAV per audited financial statements. Investments are generally not eligible for
immediate redemption and have original terms averaging 10 to 13 years, although those periods may be extended.
1

67

The following table shows how the fair value of the Level 3 assets changed during each of the last two years. There were no transfers of assets between
Level 3

Level 3 and either of the other two levels.

Balance as of April 30, 2020
Return on assets held at end of year
Sales and settlements
Balance as of April 30, 2021
Return on assets held at end of year
Sales and settlements
Balance as of April 30, 2022

$

2
1
(1)
2
—
—
2

$

The following table shows how the total fair value of all pension plan assets changed during each of the last two years. (We do not have assets set aside
for postretirement medical or life insurance benefits.)
Medical and Life
Insurance Benefits

Pension Benefits
2021

Assets at beginning of year
Actual return on assets
Retiree contributions
Company contributions
Benefits paid
Assets at end of year

$

2022

749 $
124
—
16
(53)
836 $

$

2021

836 $
(25)
—
12
(82)
741 $

2022

— $
—
1
3
(4)
— $

—
—
1
3
(4)
—

We currently expect to contribute $13 to our pension plans and $3 to our postretirement medical and life insurance benefit plans during 2023.
Funded status. The funded status of a plan refers to the difference between its assets and its obligations. The following table shows the funded status ofour plans.
Medical and Life
Insurance Benefits

Pension Benefits
April 30,

AssetsObligations
Funded status

2021

$

2022

836 $
(1,012)(176) $

$

2021

741 $
(846)
(105) $

2022

— $
(49)
(49) $

—
(43)
(43)

The funded status is recorded on the accompanying consolidated balance sheets as follows:
Medical and Life
Insurance Benefits

Pension Benefits
April 30,

Other assets
Accounts payable and accrued expenses
Accrued pension and other postretirement benefits
Net liability
Accumulated other comprehensive income (loss), before tax:
Net actuarial gain (loss)
Prior service credit (cost)

2021

$

$
$
$

68

2022

2021

2022

4 $
(7)
(173)
(176) $

46 $
(8)
(143)
(105) $

— $
(3)
(46)
(49) $

—
(3)
(40)
(43)

(298) $
(5)(303) $

(201) $
(4)(205) $

(9) $
4
(5) $

(3)
2
(1)

The following table compares our pension plans whose accumulated benefit obligations exceed their assets with our pension plans whose assets exceed
their accumulated benefit obligations.
Accumulated
Benefit Obligation
April 30,

2021

Plans with accumulated benefit obligation in excess ofassets$Plans with assets in excess of accumulated benefit
obligation
Total$

Plan Assets

2022

2021

2022

(155) $

(135) $

—

$

—

(748)
(903) $

(623)
(758) $

836
836

$

741
741

The following table compares our pension plans whose projected benefit obligations exceed their assets with our pension plans whose assets exceed theirprojected benefit obligations.
Projected
Benefit Obligation
2021

April 30,

Plans with projected benefit obligation in excess ofassetsPlans with assets in excess of projected benefit
obligation
Total

Plan Assets

2022

2021

2022

$

(941) $

(150) $

761

$

—

$

(71)
(1,012) $(696)(846) $

75
836

$

741
741

As noted above, we have no assets set aside for the postretirement medical or life insurance benefit plans.
Pension cost. The following table shows the components of the pension cost recognized during each of the last three years. The amount for each year
includes amortization of the prior service cost/credit and net actuarial loss/gain included in accumulated other comprehensive loss as of the beginning of theyear.
Pension Benefits
2020

Service cost
Interest cost
Expected return on assets
Amortization of:Prior service cost (credit)
Net actuarial loss (gain)
Settlement charge
Net cost

$

$

2021

2022

24 $
31
(46)

26 $
25
(46)

26
22
(45)

1
19
1
30

1
27
—
33

1
23
12
39

$

$

We determine the expected return on plan assets by applying our long-term rate of return assumption to the market-related value of plan assets, adjusted
by earnings on contributions and benefit payments expected to be made during the year. We calculate the market-related value of plan assets by amortizing
actual versus expected returns over five years.
We amortize prior service costs and net actuarial gains or losses on straight-line basis over the average remaining service period of the employees
expected to receive benefits under the plan. However, for net actuarial gains or losses, we use a corridor approach that amortizes them only to the extent thegain or loss exceeds 10% of the greater of the projected benefit obligation or market-related value of plan assets.

69

Other postretirement benefits cost. The following table shows the components of the postretirement medical and life insurance benefits cost that we
recognized during each of the last three years.
Medical and Life Insurance Benefits
2020

Service cost
Interest cost
Amortization of:Prior service cost (credit)
Net actuarial loss (gain)
Net cost

2021

$

1
1

2022

$

1
1

(3)
1
— $

$

$

1
1

(3)
1
— $

(2)
1
1

We amortize prior service costs and net actuarial gains or losses on straight-line basis over the average remaining service period of the employees
expected to receive benefits under the plan.
Other comprehensive income (loss). Prior service cost/credit and net actuarial loss/gain are recognized in other comprehensive income or loss (OCI)
during the period in which they arise. These amounts are later amortized from accumulated OCI into pension and other postretirement benefit cost over future
periods as described above. The following table shows the pre-tax effect of these amounts on OCI during each of the last three years.
Medical and Life
Insurance Benefits

Pension Benefits
2020

Net actuarial gain (loss)
Amortization reclassified to earnings:
Prior service cost (credit)
Net actuarial loss (gain)
Net amount recognized in OCI

2021

2022

$

(115) $

69

$

1
20
(94) $

1
27
97

2020

$

62

$

1
35
98

2021

2022

$

(2) $

1

$

5

$

(3)
1
(4) $

(3)
1
(1) $

(2)
1
4

Assumptions and sensitivity. We use various assumptions to determine the obligations and cost related to our pension and other postretirement benefit
plans. The weighted-average assumptions used in computing benefit plan obligations as of the end of the last two years were as follows:
Medical and Life
Insurance Benefits

Pension Benefits
2021

Discount rate
Rate of salary increase
Interest crediting rate2022

3.16 %
4.00 %
3.06 %

2021

4.36 %
4.00 %
3.06 %

2022

3.08 %
n/a
n/a

4.33 %n/a
n/a

The weighted-average assumptions used in computing benefit plan cost during each of the last three years were as follows:
Medical and Life
Insurance Benefits

Pension Benefits
2020

Discount rate for service cost
Discount rate for interest cost
Rate of salary increase
Interest crediting rate
Expected return on plan assets

4.17 %
3.57 %
4.00 %
3.07 %
6.50 %

2021

3.49 %
2.56 %
4.00 %
3.07 %
6.50 %

2022

3.36 %
2.34 %
4.00 %
3.06 %
6.25 %

2020

4.24 %
3.53 %
n/a
n/a
n/a

2021

3.59 %
2.47 %
n/a
n/a
n/a

2022

3.49 %
2.27 %n/a
n/an/a

The assumed discount rates are determined using a yield curve based on the interest rates of high-quality debt securities with maturities corresponding to
the expected timing of our benefit payments. The service cost and interest cost components are measured by applying the specific spot rates along the yield
curve used to measure the benefit obligation at the beginning of the period.

70

The assumed rate of salary increase reflects the expected average annual increase in salaries as a result of inflation, merit increases, and promotions overthe service period of the plan participants.
The assumed interest crediting is based on the greater of the average yield on 30-year Treasury bonds or the minimum rate specified in the applicablepension plan.
The expected return on plan assets represents the long-term rate of return that we assume will be earned over the life of the pension assets. The
assumption reflects expected capital market returns for each asset class, which are based on historical returns, adjusted for the expected effects ofdiversification.
The assumed health care cost trend rates as of the end of the last two years were as follows:
Medical and Life
Insurance Benefits
2021

Health care cost trend rate assumed for next year
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
Year that the rate reaches the ultimate trend rate2022

6.60 %
4.50 %
2030

6.10 %
4.50 %
2030

Savings plans. We also sponsor various defined contribution benefit plans that together cover substantially all U.S. employees. Employees can makevoluntary contributions in accordance with their respective plans, which include a 401(k) tax deferral option. We match a percentage of each employee's
contributions in accordance with plan terms. We expensed $12, $12, and $13 for matching contributions during 2020, 2021, and 2022, respectively.
International plans. The information presented above for defined benefit plans and defined contribution benefit plans reflects amounts for U.S. plans
only. Information about similar international plans is not presented due to immateriality.
10. Stock-Based Compensation
The Brown-Forman 2013 Omnibus Compensation Plan (Plan) is our incentive compensation plan, designed to reward participants (including eligible
officers, employees, and non-employee directors) for company performance. Under the Plan, we can grant stock-based incentive awards for up to 20,750,000
shares of common stock to eligible participants until July 28, 2023. As of April 30, 2022, awards for approximately 12,412,000 shares remain available forissuance under the Plan. We try to limit the source of shares delivered to participants under the Plan to treasury shares that we purchase from time to time on
the open market (in connection with a publicly announced share repurchase program), in private transactions, or otherwise.
Awards granted under the Plan include stock-settled stock appreciation rights (SSARs), performance-based restricted stock units (PBRSUs), and deferredstock units (DSUs).
SSARs. We grant SSARs at an exercise price equal to the closing market price of the underlying stock on the grant date. SSARs become exercisable after
three years from the first day of the fiscal year of grant and generally are exercisable for seven years after that date. The following table presents information
about SSARs outstanding as of April 30, 2022, and for the year then ended.
WeightedAverage
Exercise Priceper SSAR

Number of
SSARs(in thousands)

Outstanding at April 30, 2021
GrantedExercised
Forfeited or expired
Other

WeightedAverage
Remaining
ContractualTerm (years)

Aggregate
Intrinsic Value

$

43.54
71.24
29.67
63.82

Outstanding at April 30, 2022

4,311
451
(565)
(29)
64
4,232

$

47.54

4.9

$

86

Exercisable at April 30, 2022

2,829

$

39.55

3.5

$

79

71

We use the Black-Scholes pricing model to calculate the grant-date fair value of a SSAR. The weighted-average grant-date fair values and related
valuation
assumptions
for
the
SSARS
grantedduring
each
of
the
last
three
years
were
as
follows:
2020

Grant-date fair value
Valuation assumptions:
Expected term (years)
Risk-free interest rate
Expected volatility
Expected dividend yield

$

2021

11.13

$

2022

14.61

7.0
1.9 %
19.3 %
1.2 %

$

16.61

7.0
0.4 %
23.3 %
1.0 %

7.0
1.0 %
24.1 %
1.0 %The expected term is based on past exercise experience for similar awards. The risk-free interest rate is based on zero-coupon U.S. Treasury rates as of thedate of grant. Expected volatility and dividend yield are based on historical data, with consideration of other factors when applicable.
PBRSUs. The PBRSUs vest at the end of a three-year performance period that begins on the first day of the fiscal year of grant. Performance is measured
by comparing the three-year cumulative total shareholder return of our Class B common stock to the three-year cumulative total shareholder return of thecompanies in the Standard & Poor's Consumer Staples Index, with specific payout levels ranging from 50% to 150%. At the end of the performance period, thenumber of PBRSUs is adjusted for performance, and then adjusted upward to account for dividends paid during the second and third years of the performance
period. The resulting PBRSUs are then converted to common shares.
The following table presents information about PBRSUs outstanding as of April 30, 2022, and for the year then ended.
WeightedAverage
Fair Value atGrant Date

Number of
PBRSUs(in thousands)

Outstanding at April 30, 2021
GrantedAdjusted for performance and dividends
Converted to common shares
Forfeited
Outstanding at April 30, 2022

254
108
(10)
(77)
(5)
270

$
$
$
$
$

61.76
70.11
55.28
55.28
69.19

$

67.02

We calculate the grant-date fair value of a PBRSU using a Monte Carlo simulation technique. The weighted average grant-date fair values and related
valuation assumptions for these awards granted during each of the last three years were as follows:
2020

Grant-date fair value
Valuation assumptions:Risk-free interest rate
Expected volatility
Expected dividend yield
Remaining performance period (years) as of grant
date

$

2021

56.99

$

2022

73.68

$

70.11

1.8 %
21.8 %
1.2 %

0.1 %29.9 %
1.1 %0.3 %29.1 %
1.0 %

2.8

2.8

2.8

DSUs. DSUs are granted to our non-employee directors. Each DSU represents the right to receive one share of common stock based on the closing priceof the shares on the date of grant. Outstanding DSUs are credited with dividend-equivalent DSUs when dividends are paid on our common stock. Each annual
grant vests after one year. DSUs are paid out in shares after the completion of a director's tenure on the board plus a six-month waiting period. The director may
elect to receive the distribution either in a single lump sum or in ten equal annual installments. As of April 30, 2022, there were approximately 225,000
outstanding DSUs, of which approximately 201,000 were vested.
The grant-date fair value of a DSU is the closing market price of the underlying stock on the grant date. The weighted average grant-date fair values forthese awards granted during each of the last three years were as follows:
2020

Grant-date fair value

$

2021

53.34

$

72

2022

63.01

$

67.35

Additional information. The pre-tax stock-based compensation expense and related deferred income tax benefits recognized during the last three fiscal
years were as follows:
2020

Pre-tax compensation expense
Deferred tax benefit

$

2021

11
2

$

2022

12
2

$

15
2

As of April 30, 2022, there was $9 of total unrecognized compensation cost related to non-vested stock-based awards. That cost is expected to berecognized over a weighted-average period of 1.5 years. Further information related to our stock-based awards for the last three years is as follows:
2020

Intrinsic value of SSARs exercised
Fair value of shares vested
Excess tax benefit from exercise / vesting of awards

$

2021

89

$

2022

47

$

23

14

13

7

20

10

6

11. Income Taxes
We incur income taxes on the earnings of our U.S. and foreign operations. The following table, based on the locations of the taxable entities from whichsales were derived (rather than the location of customers), presents the U.S. and foreign components of our income before income taxes:
2020

United States
Foreign

$

2021

849
160
1,009

$

$

2022

832
249
1,081

$

$

954
160
1,114

$

The income shown above was determined according to GAAP. Because those standards sometimes differ from the tax rules used to calculate taxable
income, there are differences between: (a) the amount of taxable income and pretax financial income for a year and (b) the tax bases of assets or liabilities andtheir amounts as recorded in our financial statements. As a result, we recognize a current tax liability for the estimated income tax payable on the current tax
return, and deferred tax liabilities (tax on income that will be recognized on future tax returns) and deferred tax assets (tax from deductions that will berecognized on future tax returns) for the estimated effects of the differences mentioned above.
Total income tax expense for a year includes the tax associated with the current tax return (current tax expense) and the change in the net deferred tax
asset or liability (deferred tax expense). Our total income tax expense for each of the last three years was as follows:
2020

Current:
U.S. federal
ForeignState and local$

Deferred:
U.S. federal
ForeignState and local
$

73

2021

95
29
19
143

$

34
7
(2)
39
182 $

2022

146
50
35
231

$

205
64
18
287

(4)
(47)
(2)
(53)
178 $

1
(9)
(3)
(11)
276

Our consolidated effective tax rate usually differs from current statutory rates due to the recognition of amounts for events or transactions with no tax
consequences. The following table reconciles our effective tax rate to the federal statutory tax rate in the United States:
Percent of Income Before Taxes
2020

2021

U.S. federal statutory rate
State taxes, net of U.S. federal tax benefit
Income taxed at other than U.S. federal statutory rate
Prior intercompany sales taxed at higher than current U.S. federal statutory rate
Tax benefit from foreign-derived sales
Adjustments related to prior years
Excess tax benefits from stock-based awards
Tax rate changes
Intercompany transfer of assets
Other, net
Effective rate

21.0 %
1.7 %—%—%(2.0 %)(1.1 %)(2.0 %)—%—%
0.4 %
18.0 %

2022

21.0 %
2.4 %
0.3 %
0.2 %
(1.7 %)(0.2 %)(1.0 %)—%(4.0 %)(0.5 %)
16.5 %

21.0 %
1.0 %
1.3 %
2.0 %
(1.8)%
0.7 %(0.5)%
0.4 %
—%
0.7 %
24.8 %

Deferred tax assets and liabilities as of the end of each of the last two years were as follows:
2021

April 30,

Deferred tax assets:
Postretirement and other benefits
Accrued liabilities and other
Inventories
Lease liabilities
Derivative instruments
Loss and credit carryforwards
Total deferred tax assets
Valuation allowance
Total deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Intangible assets
Property, plant, and equipment
Right-of-use assets
Derivative instruments
Other
Total deferred tax liabilities
Net deferred tax liability

$

$

2022

90 $
47
30
17
5
63
252
(20)
232

69
36
40
20
—
69
234
(27)
207

(214)
(89)
(17)
—
(11)
(331)
(99) $

(219)
(87)
(20)
(11)
(15)
(352)
(145)

Details of the loss and credit carryforwards and related valuation allowances as of the end of each of the last two years are as follows:
April 30, 2021
Gross
AmountU.S.
Foreign

$
$

1

99
228
327

April 30, 2022

Deferred Tax
Asset

$
$

15
48
63

Valuation
Allowance$

Gross Amount

(5) $
(15)
(20) $

$

53
241
294

Deferred Tax
Asset

$
$

19
50
69

Valuation
Allowance

$
$

(8)
(19)
(27)

Expiration (as ofApril 30, 2022)

Various1
Various2

As of April 30, 2022, the deferred tax asset amount includes credit carryforwards of $8 that do not expire and loss and credit carryforwards of $11 that expire in varying amounts from 2023 to 2039.

2As of April 30, 2022, the deferred tax asset includes loss carryforwards of $19 that do not expire and $31 that expire in varying amounts over the next 9 years.

74As of April 30, 2022, we had approximately $1,446 of undistributed earnings from our foreign subsidiaries ($1,542 at April 30, 2021). Most of theseearnings have been previously subject to tax, primarily as a result of the one-time repatriation tax on foreign earnings required by the 2017 Tax Cuts and Jobs
Act. Historically, we have asserted that the undistributed earnings of our foreign subsidiaries are reinvested indefinitely outside the United States. We continue
to maintain indefinite reinvestment assertions for most undistributed earnings of our foreign subsidiaries, and no deferred taxes have been provided on theearnings. For undistributed earnings not considered permanently reinvested, deferred tax liabilities have been provided for any applicable income taxes andwithholding taxes payable in various countries, which are not significant. We have also asserted that other outside basis differences related to our foreignsubsidiaries are reinvested indefinitely and that the determination of any unrecognized deferred tax liabilities is not practicable due to the complexities in thecalculations. The other outside basis differences relate primarily to differences between U.S. GAAP and tax basis that arose through purchase accounting.
These basis differences could reverse through sales of foreign subsidiaries or other transactions, none of which are considered probable as of April 30, 2022.
At April 30, 2022, we had $14 of gross unrecognized tax benefits, $11 of which would reduce our effective income tax rate if recognized. A reconciliationof the beginning and ending unrecognized tax benefits follows:
2020

Unrecognized tax benefits at beginning of year
Additions for tax positions provided in prior periods
Additions for tax positions provided in current period
Decreases for tax positions provided in prior years
Settlements of tax positions in the current period
Lapse of statutes of limitations
Unrecognized tax benefits at end of year

$

$

2021

11 $
2
—
(1)
(1)
—
11 $

2022

11 $
1
2
—
(1)
(1)
12 $

12
2
2
—
—
(2)
14

We file income tax returns in the United States, including several state and local jurisdictions, as well as in several other countries where we conductbusiness. The major jurisdictions and their earliest fiscal years that are currently open for tax examinations are 2016 through 2021 in the United States,
inclusive of federal and states; 2020 in the United Kingdom; 2018 in Australia; 2017 in Finland, Germany, Hungary, Korea, and Poland; 2016 in the
Netherlands and Brazil; and 2013 in Mexico. In addition, we are participating in the Internal Revenue Service's Compliance Assurance Program for our fiscal
2022 tax year.
We believe there will be no material change in our gross unrecognized tax benefits in the next 12 months.
12. Acquisitions and Divestitures
Acquisitions. On July 3, 2019, we acquired 100% of the voting interests in The 86 Company, which owns Fords Gin, for $22 in cash. The purchase price
was allocated largely to the intangible assets that were acquired, including goodwill of $11 and other indefinite-lived intangibles of $12, net of deferred tax
liabilities of $1. The goodwill is primarily attributable to the value of leveraging our distribution network and brand-building expertise to grow global sales of
the Fords Gin brand and to the knowledge and expertise of the organized workforce employed by the acquired business. We do not expect the goodwill to be
deductible for tax purposes.
On December 1, 2020, we acquired 100% of the voting interests in Part Time Rangers Holdings Limited (Part Time Rangers) for $14 in cash (including
repayment of debt). Part Time Rangers, which is based in New Zealand, produces spirits-based ready-to-drink products with all-natural fruit flavoring. The
purchase price was allocated largely to the intangible assets of the acquired business, including goodwill of $8 and other intangible assets of $8, net of deferred
tax liabilities of $2. The goodwill is primarily attributable to the value of leveraging our distribution network and brand-building expertise to grow sales of thePart Time Rangers brand. We do not expect the goodwill to be deductible for tax purposes.
The 86 Company and Part Time Rangers have been included in our consolidated financial statements since their respective acquisition dates. Actual andpro forma results are not presented due to immateriality.
Divestiture. On July 31, 2020, we sold the Early Times, Canadian Mist, and Collingwood brands for $177 in cash. The sale reflects the continued
evolution of our portfolio strategy to focus on premium spirits brands. The total book value of the related business assets included in the sale was $50,
consisting largely of inventories, the Canadian Mist production assets, and intellectual property. As a result of the sale, we recognized a pre-tax gain of $127
during fiscal 2021.

75

13. Derivative Financial Instruments and Hedging Activities
We are subject to market risks, including the effect of fluctuations in foreign currency exchange rates, commodity prices, and interest rates. We use
derivatives to help manage financial exposures that occur in the normal course of business. We formally document the purpose of each derivative contract,which includes linking the contract to the financial exposure it is designed to mitigate. We do not hold or issue derivatives for trading or speculative purposes.
We use currency derivative contracts to limit our exposure to the foreign currency exchange 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 accumulated other comprehensive income (AOCI) until the underlying hedged transaction occurs, at which time wereclassify that amount into earnings.
Some of our currency derivatives are not designated as hedges because we use them to partially offset the immediate earnings impact of changes inforeign 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 and $801 at April 30, 2021 and 2022, respectively. The maximum term of outstanding derivative contracts wasapproximately 36 months at both April 30, 2021 and 2022.
We also use foreign currency-denominated debt to help manage our foreign currency exchange 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. Anychange 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 designated as net investment hedges was $680 and $636 as ofApril 30, 2021 and 2022, respectively.
At inception, we expect each financial instrument designated as a hedge to be highly effective in offsetting the financial exposure it is designed tomitigate. We also assess their effectiveness continually. If determined to be no longer highly effective, we stop designating and accounting for the instrument as
a hedge.
We use forward purchase contracts with suppliers to protect against corn price volatility. We expect to take physical delivery of the corn underlying eachcontract and use it for production over a reasonable period of time. Accordingly, we account for these contracts as normal purchases rather than as derivative
instruments.
The following table presents the pre-tax impact that changes in the fair value of our derivative instruments and non-derivative hedging instruments had on
AOCI and earnings during each of the last three years:
Classification inStatement of Operations

Currency derivatives designated as cash flow hedges:
Net gain (loss) recognized in AOCI
Net gain (loss) reclassified from AOCI into earnings
Net gain (loss) reclassified from AOCI into earnings
Currency derivatives not designated as hedging instruments:
Net gain (loss) recognized in earnings
Net gain (loss) recognized in earnings
Foreign currency-denominated debt designated as net investment hedge:
Net gain (loss) recognized in AOCI

n/a
Sales
Other income(expense), net

2020

76
5

—

—

2

Sales
Other income(expense), net

4
(14)

(13)
17

12
5

n/a

22

(73)

78

4,306
(11)

4,526
15

5,081
(59)

76

61
23

$

2022

(78) $
21

Total amounts presented in the accompanying consolidated statements of operations for line items
affected by the net gains (losses) shown above:
Sales
Other income (expense), net

$

2021

We expect to reclassify $26 of deferred net gains on cash flow hedges recorded in AOCI as of April 30, 2022, to earnings during fiscal 2023. 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 as of April 30, 2021 and 2022:
Balance Sheet Classification

Derivative Assets

Derivative Liabilities

April 30, 2021

Designated as cash flow hedges:
Currency derivatives
Currency derivatives
Currency derivatives
Currency derivatives
Not designated as hedges:
Currency derivatives
Currency derivatives

April 30, 2022

Designated as cash flow hedges:
Currency derivatives
Currency derivatives
Currency derivatives
Currency derivatives
Not designated as hedges:
Currency derivatives
Currency derivatives

Other current assets
Other assets
Accrued expenses
Other liabilities

$

4
—
4
1

$

(2)
—
(18)
(18)

Other current assets
Accrued expenses

1
—

—
—

Other current assets
Other assets
Accrued expenses
Other liabilities

32
20
—
—

(3)
(1)
—
—

Other current assets
Accrued expenses

—
—

—
(1)

The fair values reflected in the above table are presented on a gross basis. However, as discussed further below, the fair values of those instruments
subject to net settlement agreements are presented on a net basis in our balance sheets.
In our statements of cash flows, we classify cash flows related to cash flow hedges in the same category as the cash flows from the hedged items.
Credit risk. We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value ofthe contracts. To manage this risk, we contract only with major financial institutions that have earned investment-grade credit ratings and with whom we havestandard International Swaps and Derivatives Association (ISDA) agreements that allow for net settlement of the derivative contracts. Also, we haveestablished 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 require 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 and $0 at April 30,
2021 and 2022, respectively.
Offsetting. As noted above, our derivative contracts are governed by ISDA agreements that allow for net settlement of derivative contracts with the same
counterparty. It is our policy to present the fair values of current derivatives (that is, those with a remaining term of 12 months or less) with the same
counterparty on a net basis in our balance sheets. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. We
do not net current derivatives with noncurrent derivatives in our balance sheets.

77The following table summarizes the gross and net amounts of our derivative contracts:
Gross Amounts ofRecognized Assets(Liabilities)

Gross Amounts Offset
inBalance Sheet

Net Amounts Presented
in Balance Sheet

Gross Amounts Not
Offset in Balance Sheet

$

$

$

Net Amounts

April 30, 2021

Derivative assets
Derivative liabilities$

April 30, 2022

Derivative assets
Derivative liabilities

10
(38)

(7)
7

52
(5)

3
(31)

(4)
4

(1)
1

48
(1)

$

2
(30)

(1)
1

47
—

No cash collateral was received or pledged related to our derivative contracts as of April 30, 2021 or 2022.
14. Fair Value Measurements
The following table summarizes the assets and liabilities measured or disclosed at fair value on a recurring basis:
2021
Carrying
AmountApril 30,

Assets:Cash and cash equivalents
Currency derivatives
Liabilities:
Currency derivatives
Short-term borrowings
Long-term debt (including current portion)

$

1,150
3
31
205
2,354

2022
Fair
Value

$

Carrying
Amount

1,150
3
31
205
2,663

$

Fair
Value

868
48
1
—
2,269

$

868
48
1
—
2,239

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 byobservable 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 doadjust them to fair value in some circumstances (for example, when we determine that an asset is impaired). During fiscal 2022, we recognized non-cash
impairment charges of $9 on 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 fixed assets is not significant. Additionally, as discussed in
Note 4, we recognized a non-cash impairment charge of $52 during fiscal 2022 related to our Finlandia brand name. The

78

impairment charge was based on the estimated fair value of the brand name, which we determined using the “relief from royalty” method, and which iscategorized as Level 3 within the valuation hierarchy. No other material nonrecurring fair value measurements were required during the periods presented inthese financial statements.
15. Leases
We enter into lease arrangements, which we use primarily for office space, vehicles, and land. Substantially all of our leases are operating leases. Ourfinance leases are not material.
We record lease liabilities and right-of-use (ROU) assets on our balance sheet for leases with terms exceeding 12 months. We do not record leaseliabilities or ROU assets for short-term leases. The amounts recorded for lease liabilities and ROU assets are based on the estimated present value, as of thelease commencement date, of the future payments to be made over the lease term. We calculate the present value using our incremental borrowing rate that
corresponds to the term of the lease. We include the effect of an option to renew or terminate a lease in the lease term when it is reasonably certain that we will
exercise the option.
Some of our leases contain non-lease components (e.g., maintenance or other services) in addition to lease components. We have elected the practical
expedient not to separate the non-lease components from the lease components.
The following table shows information about our leases as of the end of the last two years:
April 30,
2021

Balance Sheet Classification

April 30,
2022

Right-of-use assets

Other assets

$

67

$

74

Lease liabilities:
Current
Non-current
Total

Accounts payable and accrued expenses
Other liabilities

$

20
49
69

$

21
54
75

$

Weighted-average discount rate
Weighted-average remaining term$

1.9%
5.3 years

1.8%
5.0 years

The following table shows information about the effects of leases during each of the last three years:
2020

Total lease cost1
Cash paid for amounts included in the measurement of lease liabilities2
Right-of-use assets obtained in exchange for new lease liabilities
1
2$

Consists primarily of operating lease cost. Other components of lease cost were not material.
Classified within operating activities in the accompanying consolidated statements of cash flows.

79

2021

29
21
35

$

2022

41
26
25

$

38
25
35

The following table includes a maturity analysis of future (undiscounted) lease payments and a reconciliation of those payments to the lease liabilities
recorded on our balance sheet as of April 30, 2022:
April 30,
2022

2023
2024
2025
2026
2027
Thereafter
Total lease payments
Less: Present value discountLease liabilities

$

$

80

22
18
13
9
7
10
79
(4)
75

16. Other Comprehensive Income
The following table presents the components of net other comprehensive income (loss) during each of the last three years:
Pre-Tax

Tax

Net

Year Ended April 30, 2020

Currency translation adjustments:
Net gain (loss) on currency translation
Reclassification to earnings
Other comprehensive income (loss), net
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments
Reclassification to earnings1
Other comprehensive income (loss), net
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost
Reclassification to earnings2
Other comprehensive income (loss), net$

Total other comprehensive income (loss), net(88) $
—

(6) $
—

(94)
—

(88)

(6)

(94)

61
(23)
38

(14)
6
(8)

47
(17)
30

(119)
18
(101)

28
(4)
24

(91)
14
(77)

$

(151) $

10

$

(141)

$

106
—
106

17
—
17

$

123
—
123

Year Ended April 30, 2021

Currency translation adjustments:
Net gain (loss) on currency translation
Reclassification to earnings
Other comprehensive income (loss), net
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments
Reclassification to earnings1
Other comprehensive income (loss), net
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost
Reclassification to earnings2
Other comprehensive income (loss), net
Total other comprehensive income (loss), net

$

(78)
(21)
(99)

17
6
23

(61)
(15)
(76)

71
30
101

(16)
(7)
(23)

55
23
78

$

108

$

$

17

$

125

(42) $—(18) $
—

(60)
—

(42)

(18)

(60)

76
(7)
69

(17)
1
(16)

59
(6)
53

67
34
101

(16)
(8)
(24)

51
26
77

(58) $

70

Year Ended April 30, 2022

Currency translation adjustments:
Net gain (loss) on currency translation
Reclassification to earnings
Other comprehensive income (loss), net
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments
Reclassification to earnings1
Other comprehensive income (loss), net
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost
Reclassification to earnings2
Other comprehensive income (loss), net
Total other comprehensive income (loss), net

$

128

$

For 2022, $(2) of the pre-tax amount of $(7) is classified in other income in the accompanying consolidated statements of operations. Otherwise, the pre-tax amount for eachyear is classified as sales.
2
For 2021, $4 of the pre-tax amount of $30 is classified in gain on sale of business in the accompanying consolidated statements of operations. Otherwise, the pre-tax amount foreach year is classified as non-operating postretirement expense.
181

17. Supplemental Information
The following table presents net sales by geography:
2020

Net sales:
United States
Germany
Australia
United Kingdom
Mexico
Other

$

$

2021

1,690
171
155
180
155
1,012
3,363

$

$

2022

1,748
206
209
205
150
943
3,461

$

$

1,917
228
219
218
178
1,173
3,933

Net sales are attributed to countries based on where customers are located. See Note 8 for additional information about net sales, including net sales byproduct category.
Our two largest customers accounted for 18% and 13% of consolidated net sales in 2020; 19% and 13% of consolidated net sales in 2021; and 14% and
12% of consolidated net sales in 2022.
The net book value of property, plant, and equipment located outside the United States was $107 and $116 as of April 30, 2021 and 2022, respectively.
Other long-lived assets located outside the United States are not significant.
We have concluded that our business constitutes a single operating segment.

82

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. 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 inRule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of fiscal 2022. 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 ourreports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules andforms; and (b) include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated andcommunicated 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 quarter endedApril 30, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management's Report on Internal Control over Financial Reporting and Report of Independent Registered Public Accounting Firm. Management's reporton our internal control over financial reporting as of April 30, 2022, and our independent registered public accounting firm's report on our internal control overfinancial reporting are set forth in “Item 8. Financial Statements and Supplementary Data.”
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers, and Corporate Governance
Information on our Executive Officers is included under the caption “Employees and Executive Officers” in Part I of this report. For the other information
required by this item, see the following sections of our definitive proxy statement for the Annual Meeting of Stockholders to be held July 28, 2022 (“2022Proxy Statement”), which information is incorporated into this report by reference: (a) “Proposal 1: Election of Directors” (for biographical information on
directors and family relationships); (b) “Code of Conduct and Code of Ethics for Senior Financial Officers” (for information on our code of ethics);(c) “Selection of Directors” (for information on the procedures by which security holders may recommend nominees to the Company's Board of Directors); and(d) “Board Committees” (for information on our Audit Committee).
Item 11. Executive Compensation
For the information required by this item, refer to the following sections of our 2022 Proxy Statement, which information is incorporated into this reportby reference: (a) “Compensation Discussion and Analysis”; (b) “Compensation Tables”; (c) “Director Compensation”; (d) “Compensation Committee
Interlocks and Insider Participation”; (e) “Compensation Committee Report”; and (f) “Pay Ratio Disclosure.”83

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table summarizes information as of April 30, 2022, about our equity compensation plans under which we have made grants of stock
options, stock appreciation rights, restricted stock, market value units, performance units, or other equity awards.

Plan Category
Equity compensation plans approved by Class A
common stockholders

Number of Securities to Be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights1

Weighted-Average Exercise
Price of Outstanding
Options, Warrants andRights2

Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans

1,767,784$47.54

12,412,433

Includes 1,272,605 Class B common shares to be issued upon exercise of stock-settled stock appreciation rights (SSARs); 124,900 Class B performance-based restricted stock
units (PBRSUs); 145,294 Class A PBRSUs; 169,156 Class A common deferred stock units (DSUs); and 55,829 Class B common DSUs issued under the Brown-Forman 2004 or2013 Omnibus Compensation Plans. SSARs are exercisable for an amount of our common stock with a value equal to the increase in the fair market value of the common stockfrom the date the SSARs were granted. The fair market value of our common stock at fiscal year-end has been used for the purposes of reporting the number of shares to beissued upon exercise of the 4,232,521 SSARs outstanding at fiscal year-end.

1

PBRSUs and DSUs have no exercise price because their value depends on continued employment or service over time, and are to be settled for shares of Class B common
stock. Accordingly, these have been disregarded for purposes of computing the weighted-average exercise price.

2

For the other information required by this item, refer to the section entitled “Stock Ownership” of our 2022 Proxy Statement, which information isincorporated into this report by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
For the information required by this item, refer to the following sections of our 2022 Proxy Statement, which information is incorporated into this reportby reference: (a) “Certain Relationships and Related Transactions”; and (b) “Our Independent Directors.”
Item 14. Principal Accounting Fees and Services
For the information required by this item, refer to the following sections of our 2022 Proxy Statement, which information is incorporated into this reportby reference: (a) “Fees Paid to Independent Registered Public Accounting Firm”; and (b) “Audit Committee Pre-Approval Policies and Procedures.”
PART IV
Item 15. Exhibits and Financial Statement Schedules
Page(a)(1)(a)(2)

Financial Statements
The following documents are included in Item 8 of this report:
Report of Independent Registered Public Accounting Firm
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Stockholders’ Equity
Notes to Consolidated Financial Statements
Financial Statement Schedule:
Schedule II – Valuation and Qualifying Accounts

51
55
56
57
58
59
60
91

We have omitted all other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission
either because they are not required under the related instructions, because the information required is included in the consolidated financial statements andnotes thereto, or because they do not apply.

84

(a)(3) Exhibits:
The following documents are filed with this report:
Exhibit Index
10.23
First Amendment to Brown-Forman Corporation Amended and Restated Non-Employee Director Deferred Stock Unit Program*
Subsidiaries of Brown-Forman Corporation.
21
23.1
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
23.2
Consent of Ernst & Young LLP, independent registered public accounting firm.
CEO Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.1
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 (notconsidered to be filed).
101
The following materials from Brown-Forman Corporation's Annual Report on Form 10-K for the fiscal year ended April 30, 2022, in InlineXBRL (eXtensible Business Reporting Language) format: (a) Consolidated Statements of Operations, (b) Consolidated Statements ofComprehensive Income, (c) Consolidated Balance Sheets, (d) Consolidated Statements of Cash Flows, (e) Consolidated Statements ofStockholders’ Equity, and (f) Notes to Consolidated Financial Statements.
104
Cover Page Interactive Data File in Inline XBRL format (included in Exhibit 101).
The following documents have been previously filed:
Exhibit Index
Restated Certificate of Incorporation of registrant, incorporated into this report by reference to Exhibit 3(i) of Brown-Forman
3.1
Corporation’s Form 10-Q for the quarter ended July 31, 2012, filed on September 5, 2012 (File No. 002-26821).
3.2
Certificate of Amendment of Restated Certificate of Incorporation of registrant, incorporated into this report by reference to
Exhibit 3.1 of Brown-Forman Corporation’s Form 8-K filed on August 9, 2016 (File No. 001-00123).
3.3
By-laws of registrant, as amended and restated effective May 21, 2020, incorporated into this report by reference to Exhibit 3.1of Brown-Forman Corporation’s Form 8-K filed on May 27, 2020 (File No. 001-00123).
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11

Description of Brown-Forman Corporation’s Class A Common Stock, par value $0.15 per share, and Class B Common Stock,par value $0.15 per share, incorporated into this report by reference to Exhibit 4.1 of Brown-Forman Corporation’s Form 10-K
for the fiscal year ended April 30, 2020, filed on June 19, 2020 (File No. 001-00123).
Description of Brown-Forman Corporation’s 1.200% Notes due 2026, incorporated into this report by reference to Exhibit 4.2
of Brown-Forman Corporation’s Form 10-K for the fiscal year ended April 30, 2020, filed on June 19, 2020 (File No. 00100123).
Description of Brown-Forman Corporation’s 2.600% Notes due 2028, incorporated into this report by reference to Exhibit 4.3
of Brown-Forman Corporation’s Form 10-K for the fiscal year ended April 30, 2020, filed on June 19, 2020 (File No. 00100123).
Indenture dated as of April 2, 2007, between Brown-Forman Corporation and U.S. Bank National Association, as Trustee,incorporated into this report by reference to Exhibit 4.1 of Brown-Forman Corporation’s Form 8-K filed on April 3, 2007 (FileNo. 002-26821).
First Supplemental Indenture dated as of December 13, 2010, between Brown-Forman Corporation and U.S. Bank National
Association, as Trustee, incorporated into this report by reference to Exhibit 4.2 of Brown-Forman Corporation’s Form S3ASR Registration Statement filed on December 13, 2010 (File No. 333-171126).
Second Supplemental Indenture dated as of June 24, 2015, between Brown-Forman Corporation and U.S. Bank National
Association, as Trustee, incorporated into this report by reference to Exhibit 4.3 of Brown-Forman Corporation’s Form S3ASR Registration Statement filed on June 24, 2015 (File No. 333-205183).
Form of 2.25% Note due 2023, incorporated into this report by reference to Exhibit 4.5 of Brown-Forman Corporation’s Form
8-K filed on December 12, 2012 (File No. 002-26821).
Form of 1.200% Note due 2026, incorporated into this report by reference to Exhibit 4.5 of Brown-Forman Corporation’s Form
8-K filed on July 8, 2016 (File No. 002-26821).
Form of 2.600% Note due 2028, incorporated into this report by reference to Exhibit 4.6 of Brown-Forman Corporation’s Form
8-K filed on July 8, 2016 (File No. 002-26821).
Form of 3.500% Note due 2025, incorporated into this report by reference to Exhibit 4.5 of Brown-Forman Corporation’s Form
8-K filed on March 26, 2018 (File No. 001-00123).
Form of 3.75% Note due 2043, incorporated into this report by reference to Exhibit 4.6 of Brown-Forman Corporation’s Form
8-K filed on December 12, 2012 (File No. 002-26821).

85

Exhibit Index
4.12
Form of 4.00% Note due 2038, incorporated into this report by reference to Exhibit 4.6 of Brown-Forman Corporation’s Form
8-K filed on March 26, 2018 (File No. 001-00123).
4.13
Form of 4.500% Notes due 2045, incorporated into this report by reference to Exhibit 4.5 of Brown-Forman Corporation’s
Form 8-K filed on June 29, 2015 (File No. 002-26821).
Officer’s Certificate dated December 12, 2012, pursuant to Sections 1.01, 2.02, 3.01, and 3.03 of the Indenture dated as of
4.14
April 2, 2007, as supplemented by the First Supplemental Indenture dated as of December 13, 2010, between Brown-Forman
Corporation and U.S. Bank National Association, as Trustee, setting forth the terms of the 2.25% Notes due 2023, and the
3.75% Notes due 2043, incorporated into this report by reference to Exhibit 4.3 of Brown-Forman Corporation’s Form 8-K
filed on December 12, 2012 (File No. 002-26821).
4.15
Officer’s Certificate dated June 29, 2015, pursuant to Sections 1.02, 2.02, 3.01 and 3.03 of the Indenture dated as of April 2,
2007, as supplemented by the First Supplemental Indenture dated as of December 13, 2010, and the Second Supplemental
Indenture dated as of June 24, 2015, between Brown-Forman Corporation and U.S. Bank National Association, as Trustee,setting forth the terms of the 4.500% Notes due 2045, incorporated into this report by reference to Exhibit 4.4 of BrownForman Corporation’s Form 8-K filed on June 29, 2015 (File No. 002-26821).
4.16
Officers’ Certificate dated July 7, 2016, pursuant to Sections 1.01, 2.02, 3.01, and 3.03 of the Indenture dated as of April 2,
2007, as supplemented by the First Supplemental Indenture dated as of December 13, 2010, and the Second Supplemental
Indenture dated as of June 24, 2015, between Brown-Forman Corporation and U.S. Bank National Association, as Trustee,setting forth the terms of the 1.200% Notes due 2026 and the 2.600% Notes due 2028, incorporated into this report byreference to Exhibit 4.4 of Brown-Forman Corporation’s Form 8-K filed on July 8, 2016 (File No. 002-26821).
Officers’ Certificate dated March 26, 2018, pursuant to Sections 1.02, 2.02, 3.01, and 3.03 of the Indenture dated April 2, 2007,
4.17
as supplemented by the First Supplemental Indenture dated as of December 13, 2010, and the Second Supplemental Indenture
dated as of June 24, 2015, between Brown-Forman Corporation and U.S. Bank National Association, as Trustee, setting forth
the terms of the 3.500% Note due 2025 and the 4.000% Note due 2038, incorporated into this report by reference to Exhibit 4.4of Brown-Forman Corporation’s Form 8-K filed on March 26, 2018 (File No. 001-00123).
10.1
A description of the Brown-Forman Savings Plan, incorporated into this report by reference to page 10 of Brown-Forman
Corporation’s definitive proxy statement filed on June 27, 1996, in connection with its 1996 Annual Meeting of Stockholders(File No. 001-00123).*
Brown-Forman Corporation Nonqualified Savings Plan, incorporated into this report by reference to Exhibit 4.1 of Brown10.2
Forman Corporation’s Form S-8 Registration Statement filed on September 24, 2010 (File No. 333-169564).*
10.3
Brown-Forman Corporation 2004 Omnibus Compensation Plan, as amended, incorporated into this report by reference to
Exhibit A of Brown-Forman Corporation’s definitive proxy statement filed on June 26, 2009, in connection with its 2009
Annual Meeting of Stockholders (File No. 002-26821).*
10.4
2010 Form of Employee Stock-Settled Stock Appreciation Right Award Agreement, incorporated into this report by reference
to Exhibit 10.1 of Brown-Forman Corporation’s Form 8-K filed on July 23, 2010 (File No. 002-26821).*
10.5
2010 Form of Non-Employee Director Stock-Settled Stock Appreciation Right Award Agreement, incorporated into this reportby reference to Exhibit 10.2 of Brown-Forman Corporation’s Form 8-K filed on July 23, 2010 (File No. 002-26821).*
10.6
2010 Form of Restricted Stock Award Agreement, incorporated into this report by reference to Exhibit 10.3 of Brown-Forman
Corporation’s Form 8-K filed on July 23, 2010 (File No. 002-26821).*
10.7
2010 Form of Restricted Stock Unit Award Agreement, incorporated into this report by reference to Exhibit 10.4 of BrownForman Corporation’s Form 8-K filed on July 23, 2010 (File No. 002-26821).*
10.8
Brown-Forman Corporation Amended and Restated Supplemental Executive Retirement Plan and First Amendment thereto,
incorporated into this report by reference to Exhibit 10(a) of Brown-Forman Corporation’s Form 10-K for the year ended April
30, 2010, filed on June 25, 2010 (File No. 002-26821).*
10.9
Second Amendment to the Brown-Forman Corporation Amended and Restated Supplemental Executive Retirement Plan,
incorporated into this report by reference to Exhibit 10(a) of Brown-Forman Corporation’s Form 10-Q for the quarter ended
January 31, 2011, filed on March 9, 2011 (File No. 002-26821).*
10.10
Brown-Forman Corporation Amended and Restated Non-Employee Director Deferred Stock Unit Program, incorporated into
this report by reference to Exhibit 10.2 of Brown-Forman Corporation’s Form 8-K filed on July 26, 2013 (File No. 00226821).*
10.11
Brown-Forman Corporation 2013 Omnibus Compensation Plan, incorporated into this report by reference to Exhibit 10.1 ofBrown-Forman Corporation’s Form 8-K filed on July 26, 2013 (File No. 002-26821).*
10.12
Form of Employee Stock-Settled Stock Appreciation Right Award Agreement, incorporated into this report by reference to
Exhibit 10.3 of Brown-Forman Corporation’s Form 8-K filed on July 26, 2013 (File No. 002-26821).*
10.13
Form of Restricted Stock Unit Award Agreement, incorporated into this report by reference to Exhibit 10.4 of Brown-Forman
Corporation’s Form 8-K filed on July 26, 2013 (File No. 002-26821).*
10.14
Form of Restricted Stock Award Agreement, incorporated into this report by reference to Exhibit 10.5 of Brown-Forman
Corporation’s Form 8-K filed on July 26, 2013 (File No. 002-26821).*86

Exhibit Index
10.15
Form of Employee Stock-Settled Stock Appreciation Right Award Agreement, incorporated into this report by reference to
Exhibit 10.1 of Brown-Forman Corporation’s Form 8-K filed on August 1, 2016 (File No. 001-00123).*
10.16
Form of Performance-Based Restricted Stock Unit Award Agreement (Class A), incorporated into this report by reference to
Exhibit 10.2 of Brown-Forman Corporation’s Form 8-K filed on August 1, 2016 (File No. 001-00123).*
10.17
Form of Performance-Based Restricted Stock Unit Award Agreement (Class B), incorporated into this report by reference to
Exhibit 10.3 of Brown-Forman Corporation’s Form 8-K filed on August 1, 2016 (File No. 001-00123).*
10.18
Fiscal 2021 Form of Performance-Based Restricted Stock Unit Award Agreement (Class A), incorporated into this report byreference to Exhibit 10.1 of Brown-Forman Corporation’s Form 10-Q for the quarter ended July 31, 2020, filed on September
2, 2020 (File No. 001-00123).*
10.19
Fiscal 2021 Form of Performance-Based Restricted Stock Unit Award Agreement (Class B), incorporated into this report byreference to Exhibit 10.2 of Brown-Forman Corporation’s Form 10-Q for the quarter ended July 31, 2020, filed on September
2, 2020 (File No. 001-00123).*
10.20
Amended and Restated Five-Year Credit Agreement, dated as of November 10, 2017, among Brown-Forman Corporation,certain borrowing subsidiaries and certain lenders party thereto, JPMorgan Chase Bank, N.A., PNC Bank, National Associationand Wells Fargo Bank, National Association, as Co-Documentation Agents, U.S. Bank National Association, as Administrative
Agent, and U.S. Bank National Association, Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, andCitigroup Global Markets Inc., as Co-Syndication Agents, Joint Lead Arrangers and Joint Bookrunners, incorporated into thisreport by reference to Exhibit 10.1 of Brown-Forman Corporation’s Form 8-K filed on November 13, 2017 (File No. 00100123).
Amendment No. 1 to Amended and Restated Five-Year Credit Agreement, dated as of November 10, 2021, among Brown10.21
Forman Corporation, U.S. Bank National Association, as Administrative Agent, and the other lenders party thereto,
incorporated into this report by reference to Exhibit 10.1 of Brown-Forman Corporation’s Form 8-K filed on November 12,
2021.
Letter Agreement between Brown-Forman Corporation and Jane C. Morreau dated May 4, 2021, incorporated into this report
10.22
by reference to Exhibit 10.1 of Brown-Forman Corporation’s Form 8-K filed on May 10, 2021 (File No. 001-00123).*
16.1
Letter from PricewaterhouseCoopers LLP to the Securities and Exchange Commission dated February 25, 2020, incorporated
into this report by reference to Exhibit 16.1 of Brown-Forman Corporation’s Form 8-K filed on February 25, 2020 (File No.
001-00123).
16.2
Letter from PricewaterhouseCoopers LLP to the Securities and Exchange Commission dated June 24, 2020, incorporated into
this report by reference to Exhibit 16.1 of Brown-Forman Corporation’s Form 8-K/A filed on June 24, 2020 (File No. 00100123).
* Indicates management contract, compensatory plan, or arrangement.

Item 16. Form 10-K Summary
None.

87

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
By:

Date: June 17, 2022
/s/ Campbell P. Brown
By:
Campbell P. Brown
Director, Chair of the Board/s/ Lawson E. Whiting
By:
Lawson E. Whiting
Director, President and Chief Executive Officerof the Company (Principal Executive Officer)/s/ Patrick Bousquet-Chavanne
By:
Patrick Bousquet-Chavanne
Director/s/ Stuart R. Brown
By:
Stuart R. Brown
Director

88/s/ Lawson E. Whiting
Lawson E. Whiting
President and Chief Executive Officer

/s/ John D. Cook
By:
John D. Cook
Director/s/ Marshall B. Farrer
By:
Marshall B. Farrer
Director/s/ Augusta Brown Holland
By:
Augusta Brown Holland
Director/s/ Michael J. Roney
By:
Michael J. Roney
Director/s/ Jan E. Singer
By:
Jan E. Singer
Director/s/ Tracy L. Skeans
By:
Tracy L. Skeans
Director/s/ Michael A. Todman
By:
Michael A. Todman
Director89

/s/ Leanne D. Cunningham
By:
Leanne D. Cunningham
Senior Vice President and Chief Financial
Officer(Principal Financial Officer)/s/ Kelli N. Brown
By:
Kelli N. Brown
Senior Vice President and Chief Accounting
Officer(Principal Accounting Officer)

90

Brown-Forman Corporation and Subsidiaries
Schedule II – Valuation and Qualifying Accounts
For the Years Ended April 30, 2020, 2021, and 2022
(Expressed in millions)Col. A

Description

2020
Allowance for doubtful accounts
Deferred tax valuation allowance
2021
Allowance for doubtful accounts
Deferred tax valuation allowance
2022
Allowance for doubtful accounts
Deferred tax valuation allowance(1)Col. B

Col. C(1)Col. C(2)Col. D

Col. E

Balance at
Beginningof Period

Additions
Charged to
Costs andExpenses

Additions
Charged to
OtherAccounts

Deductions

Balanceat Endof Period

$
$

7
25

$
$

4
2

$
$

—
—

$
$

—
5

$
$

11
22

$
$

11
22

$
$

—
10

$
$

—
—

$
$

4 (1)
12

$
$

7
20

$
$

7
20

$
$

7
8

$
$

—
—

$
$

1 (1)
1

$
$

13
27

Doubtful accounts written off, net of recoveries.

91

FIRST AMENDMENT TO
BROWN-FORMAN CORPORATIONAMENDED AND RESTATEDNON-EMPLOYEE DIRECTOR DEFERRED STOCK UNIT PROGRAM
The Brown-Forman Corporation Amended and Restated Non-Employee Director Deferred Stock Unit Program (the“Program”) is hereby amended as follows, effective as of the date this First Amendment is adopted by the Board of Directors:
1.

Section 7(b) of the Program is amended to add the following paragraph to the end thereof:

Notwithstanding the foregoing, with respect to deferrals for compensation otherwise payable in calendar year 2023 andthereafter, the Participant shall elect at the time specified in Section 4(c) for each year whether clause (i) or (ii) shall apply todeferrals for such year (i.e., a separate distribution election may be made for each year’s deferrals). In the event no suchelection is made for a calendar year, clause (i) above shall apply for distributions of the portion of the Participant’s Account(including earnings) attributable to such year.
2. A new Section 7(d) is added to the Program to read as follows:
Special One-Time Election. On a form approved by the Committee, a Participant may elect to modify his or her distribution
election under Section 7(b) for the portion of the Participant’s Account (including earnings) attributable to calendar years
through 2022. Such election must be made no later than August 1, 2022, shall be irrevocable when made, and shall apply
only if (i) the election does not take effect until at least 12 months after the date the election is made (or, with respect toinstallment distributions, the date such installments would have commenced), and (ii) each distribution is deferred for aperiod of not less than 5 years from the date such distribution would otherwise have been made absent such election.

Exhibit 21
SUBSIDIARIES OF BROWN-FORMAN CORPORATIONAs of April 30, 2022
Name
Amercain Investments, C.V.
AMG Trading, L.L.C.
The BenRiach Distillery Company Limited
Brown-Forman Australia Pty. Ltd.
Brown-Forman Beverages Europe, Ltd.
Brown-Forman Beverages Worldwide, Comercio de Bebidas Ltda.
Brown-Forman Deutschland GmbH
Brown-Forman Finland Oy
Brown-Forman France
Brown-Forman Holding Mexico S.A. de C.V.
Brown-Forman Hungary 1 Kft.
Brown-Forman Korea Ltd.
Brown-Forman Netherlands, B.V.
Brown-Forman Polska Sp. z o.o.
Brown-Forman Scotland Limited
Brown-Forman Spain, S.L.
Brown-Forman Spirits (Shanghai) Co., Ltd.
Brown-Forman Tequila Mexico, S. de R.L. de C.V.
Jack Daniel Distillery, Lem Motlow, Prop., Inc.
Sonoma-Cutrer Vineyards, Inc.
Valle de Amatitan, S.A. de C.V.

State or Jurisdiction
Of Incorporation
Netherlands
DelawareScotlandAustralia
United Kingdom
BrazilGermany
FinlandFranceMexicoHungary
Korea
Netherlands
PolandScotland
Spain
China
MexicoTennessee
California
MexicoThe names of certain subsidiaries are omitted from the above listing because such subsidiaries, considered in the aggregate as a single subsidiary, would not constitute a"significant subsidiary" under Rule 1-02(w) of Regulation S-K.

Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-253992, 333-169564, and 333-190122) of BrownForman Corporation of our report dated June 19, 2020 relating to the financial statements and financial statement schedule, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLPLouisville, Kentucky
June 17, 2022

Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:(1) Registration Statement (Form S-8 No. 333-253992) pertaining to the Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
and the Brown-Forman Corporation Savings Plan,(2) Registration Statement (Form S-8 No. 333-169564) pertaining to the Brown-Forman Corporation Nonqualified Savings Plan, and(3) Registration Statement (Form S-8 No. 333-190122) pertaining to Brown-Forman Corporation 2013 Compensation Plan;of our reports dated June 17, 2022, with respect to the consolidated financial statements and financial statement schedule of Brown-Forman Corporation andSubsidiaries and the effectiveness of internal control over financial reporting of Brown-Forman Corporation and Subsidiaries included in this Annual Report(Form 10-K) of Brown-Forman Corporation for the year ended April 30, 2022.
/s/ Ernst & Young LLPLouisville, Kentucky
June 17, 2022

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 Annual Report on Form 10-K 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 thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;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 theregistrant and have:

5.

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, 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 theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)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 materiallyaffect, the registrant’s internal control over financial reporting; andThe registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

Dated: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; andb)

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.

June 17, 2022

By: /s/ Lawson E. Whiting
Lawson E. Whiting
President and Chief Executive Officer

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 Annual Report on Form 10-K 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 thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;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 theregistrant and have:

5.

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, 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 theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)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 materiallyaffect, the registrant’s internal control over financial reporting; andThe registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

Dated: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; andb)

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.

June 17, 2022

By: /s/ Leanne D. Cunningham
Leanne D. Cunningham
Senior Vice President and Chief Financial
Officer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 Annual Report of Brown-Forman Corporation (“the Company”) on Form 10-K for the period ended April 30, 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:

June 17, 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 furnishedto 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.

CORPORATE INFORMATION
Corporate Headquarters

850 Dixie Highway / Louisville, Kentucky 40210 / (502) 585-1100
www.brown-forman.com / brown-forman@b-f.com

ListedNew York Stock Exchange -- BFA/BFBStockholders

As of April 30, 2022, there were 2,445 holders of record of Class A
Common Stock and 4,791 holders of record of Class B Common Stock.
Stockholders reside in all 50 states and in 16 foreign countries.

Registrar, Transfer Agent,and Dividend Disbursing Agent

Computershareweb.queries@computershare.com(866) 622-1917 (U.S., Canada, Puerto Rico)(781) 575-4735 (International)
Correspondence: P.O. Box 505000 / Louisville, KY 40233
Overnight Correspondence: 462 South 4th Street, Suite 1600
Louisville, KY 40202

Employees

As of April 30, 2022, Brown-Forman employed approximately
5,200 employees, excluding those employed on a part-time or
temporary basis. Brown-Forman Corporation is committed toequality of opportunity in all aspects of employment. It has been,
and will continue to be, the policy of Brown-Forman to provide fulland equal employment opportunities to all employees and potential
employees without regard to race, color, religion, national or ethnic
origin, veteran status, age, gender, gender identity or expression,sexual orientation, genetic information, physical or mental disability,
or any other legally protected status. It is also the policy of BrownForman to take affirmative action to employ and to advance in
employment all persons regardless of race, color, religion, nationalor ethnic origin, veteran status, age, gender, gender identity or
expression, sexual orientation, genetic information, physical ormental disability, or any other legally protected status, and to baseall employment decisions only on valid job requirements. This policy
applies to all terms, conditions, and privileges of employment,such as those pertaining to selection, training, transfer, promotion,compensation, and educational assistance programs.

Form 10-K

Our 2022 Form 10-K is included with this 2022 Integrated Annual Reportin its entirety, except for exhibits. Interested stockholders may obtainwithout charge a copy of our Form 10-K, or a copy of any exhibit, upon
written request to: Investor Relations, Brown-Forman Corporation,
850 Dixie Highway, Louisville, Kentucky 40210. The Form 10-K can also
be downloaded from the company’s website at www.brown-forman.com.
Click on the “Investors” section of the website and then on Financial
Reports & Filings to view the Form 10-K and other important documents.

Forward-Looking Statements

The 2022 Integrated Annual Report and the embedded electronic
content referenced herein contain “forward-looking statements” asdefined under U.S. federal securities laws. By their nature, forwardlooking statements involve risks, uncertainties, and other factors(many beyond our control) that could cause our actual results todiffer materially from our historical experience or from our current
expectations or projections. Except as required by law, we do notintend to update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise. For a

description of these risks and uncertainties, please see “ForwardLooking Statement Information,” which precedes Part I, Item 1,
Business, as well as Item 1A, Risk Factors, of the Form 10-K included
with this 2022 Integrated Annual Report.

Use of Non-GAAP Financial Information

Certain matters discussed in this 2022 Integrated Annual Report
include measures not derived in accordance with generally accepted
accounting principles (“GAAP”), including “return on average invested
capital” and organic changes in income statement line items.
Reconciliations of these measures to the most closely comparable
GAAP measures, and reasons for the company’s use of these measures,are presented in Part II, Item 7, around “Management’s Discussion andAnalysis of Financial Condition and Results of Operations,” under theheading “Non-GAAP Financial Measures” of the Form 10-K included withthis 2022 Integrated Annual Report.

Independent Registered Public Accounting Firm
Ernst & Young LLP

Stock Performance Graph

This graph compares the cumulative total shareholder return of
our Class B Common Stock against the Standard & Poor’s (S&P)
500 Index, the Dow Jones U.S. Consumer Goods Index, and the Dow
Jones U.S. Food & Beverage Index. The graph assumes $100 wasinvested on April 30, 2017, and that all dividends were reinvested. The
cumulative returns shown on the graph represent the value that theseinvestments would have had on April 30 in the years since 2017.

Indexed Total Shareholder Returnas of April 30, 2022, dividends reinvested

$250
$200
$150
$100
$50
2017

•
•
•
•

2018

2019

		2017		

2020

2021

2022

2018		 2019		 2020		 2021		

2022 Brown-Forman
Corporation

$ 100

$ 153

$ 147

$ 174

$ 215

$ 195

 S&P 500 Index

$ 100

$ 113

$ 129

$ 130

$ 189

$ 190

 Dow Jones U.S.
Consumer Goods

$ 100

$ 98

$ 109

$ 109

$ 169

$ 175

 Dow Jones U.S.
Food and Beverage

$ 100

$ 97

$ 111

$ 110

$ 138

$ 156

Environmental StewardshipAs a responsible corporate citizen, Brown-Forman iscommitted to environmental sustainability. Our efforts
focus primarily on climate action, water stewardship,
circular economy, and supply chain. This 2022 Integrated
Annual Report is printed on FSC®-certified paper.

850 Dixie Highway
Louisville, Kentucky 40210
Brown-Forman.com