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What changed in Brown–Forman's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Brown–Forman's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+325 added−331 removedSource: 10-K (2025-06-13) vs 10-K (2024-06-14)

Top changes in Brown–Forman's 2025 10-K

325 paragraphs added · 331 removed · 248 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

69 edited+10 added−16 removed46 unchanged
Biggest changeOur premium bourbons, Woodford Reserve and Old Forester, were once again selected for the Impact “Hot Brands” 2 list, marking eleven and six consecutive years on the list, respectively, as were Jack Daniel's RTDs. 4 Principal Brands Jack Daniel's Tennessee Whiskey el Jimador Tequilas 5 Jack Daniel's RTD 3 el Jimador New Mix RTD Jack Daniel's Tennessee Honey Herradura Tequilas 9 Gentleman Jack Rare Tennessee Whiskey Korbel California Champagnes 6 Jack Daniel's Tennessee Apple Korbel California Brandy 6 Jack Daniel's Tennessee Fire Sonoma-Cutrer California Wines 7 Jack Daniel's Single Barrel Collection 4 Old Forester Whiskey Row Series Jack Daniel's Bonded Tennessee Whiskey Old Forester Kentucky Straight Bourbon Whisky Jack Daniel's Sinatra Select Old Forester Kentucky Straight Rye Whisky Jack Daniel’s Winter Jack Finlandia Vodkas 8 Jack Daniel's Tennessee Rye The Glendronach Single Malt Scotch Whiskies 9 Jack Daniel's Triple Mash Blended Straight Whiskey Glenglassaugh Single Malt Scotch Whiskies 9 Jack Daniel's Bottled-in-Bond Benriach Single Malt Scotch Whiskies 9 Jack Daniel's American Single Malt Diplomático Rums 9 Jack Daniel’s 12 Year Old Chambord Liqueur Jack Daniel’s 10 Year Old Gin Mare 9 Woodford Reserve Kentucky Bourbon Fords Gin Woodford Reserve Double Oaked Slane Irish Whiskey Woodford Reserve Batch Proof Coopers' Craft Kentucky Bourbon Woodford Reserve Kentucky Rye Whiskey Woodford Reserve Baccarat Edition 1 IWSR 2023 Data. 2 Impact Databank, March 2024. 3 Jack Daniel's RTD includes Jack Daniel's & Cola, Jack Daniel’s & Coca-Cola RTD, Jack Daniel's Country Cocktails, Jack Daniel's Double Jack, and other malt- and spirit-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 Barrel Proof, and other Jack Daniel’s Single Barrel special-release expressions. 5 el Jimador Tequilas comprise all full-strength expressions of el Jimador. 6 Korbel is not an owned brand.
Biggest changeOur premium bourbons, Woodford Reserve and Old Forester, were recognized by the San Francisco Spirits Competition in 2025, where Woodford Double Double Oaked won Gold, Old Forester 1920 won Double Gold (the highest honor), and Old Forester 1897 Bottled in Bond won Gold. 4 Principal Brands Jack Daniel’s Tennessee Whiskey el Jimador Tequilas 4 Jack Daniel’s RTD 2 el Jimador New Mix RTD Jack Daniel’s Tennessee Honey Herradura Tequilas 6 Gentleman Jack Rare Tennessee Whiskey Korbel California Champagnes 5 Jack Daniel’s Tennessee Apple Korbel California Brandy 5 Jack Daniel’s Tennessee Fire Old Forester Whiskey Row Series Jack Daniel’s Single Barrel Collection 3 Old Forester Kentucky Straight Bourbon Whisky Jack Daniel’s Sinatra Select Old Forester Single Barrel Straight Bourbon Whisky Jack Daniel’s Bonded Tennessee Whiskey Diplomático Rums 6 Jack Daniel’s Winter Jack Chambord Liqueur Jack Daniel’s Bonded Tennessee Rye Gin Mare 6 Jack Daniel’s Triple Mash Blended Straight Whiskey The Glendronach Single Malt Scotch Whiskies 6 Jack Daniel’s American Single Malt Benriach Single Malt Scotch Whiskies 6 Jack Daniel’s 12 Year Old Glenglassaugh Single Malt Scotch Whiskies 6 Woodford Reserve Kentucky Bourbon Fords Gin Woodford Reserve Double Oaked Slane Irish Whiskey Woodford Reserve Kentucky Rye Whiskey Woodford Reserve Double Double Oaked Woodford Reserve Batch Proof 1 IWSR 2024 Data. 2 Jack Daniel’s RTD includes Jack Daniel’s & Coca-Cola RTD, Jack Daniel’s & Cola, Jack Daniel’s Double Jack, Jack Daniel’s Country Cocktails, and other malt- and spirit-based Jack Daniel’s RTDs. 3 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 - Barrel Proof Rye, and other Jack Daniel’s Single Barrel special-release expressions. 4 el Jimador Tequilas comprise all full-strength expressions of el Jimador. 5 Korbel is not an owned brand and we sell Korbel products under contract in the United States and other select markets.
Innovation has played an important role in the premiumization of both of these brands, including the success of high-end expressions such as Woodford Reserve Double Oaked and the Old Forester Whiskey Row Series.
Innovation has played an important role in the premiumization of both of these brands, including the success of high-end expressions such as Woodford Reserve Double Oaked, Woodford Reserve Double Double Oaked, and the Old Forester Whiskey Row Series.
In June 2022, we jointly announced a global relationship with The Coca-Cola Company to introduce the iconic Jack & Coke cocktail as a branded, ready-to-drink, pre-mixed cocktail. Since the announcement, we have launched the product in over 25 markets, including the top RTD markets such as the United States, Japan, the United Kingdom, Mexico, and Germany.
In June 2022, we jointly announced a global relationship with The Coca-Cola Company to introduce the iconic Jack & Coke cocktail as a branded, ready-to-drink, pre-mixed cocktail. Since the announcement, we have launched the product in over 25 markets, including top RTD markets such as the United States, Japan, the United Kingdom, Mexico, and Germany.
We believe that having a long-term-focused, committed, and engaged stockholder 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 our environmental, social, and governance performance and acting upon our deeply held values.
In summary, we believe that having a long-term-focused, committed, and engaged stockholder 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 our environmental, social, and governance performance and acting upon our deeply held values.
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 available free of charge by writing to our Secretary at 850 Dixie Highway, Louisville, Kentucky 40210 or emailing Secretary@b-f.com.
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 available free of charge by writing to our Secretary at 850 Dixie Highway, Louisville, Kentucky 40210 or emailing Secretary@b-f.com. 15
We believe ERGs are instrumental in enriching our company's culture and our employees experience by: • supporting development and engagement of our diverse workforce; • driving cultural awareness and competency across the organization; • enabling authentic engagement with our consumers; and • creating spaces for our employees and their allies to connect with, support, and advocate for one another.
We believe ERGs are instrumental in enriching our company’s culture and our employees’ experience by supporting development and engagement of our diverse workforce; driving cultural awareness and competency across the organization; enabling authentic engagement with our consumers; and creating spaces for our employees and their allies to connect with, support, and advocate for one another.
We created the Brown-Forman Foundation (the Foundation) in fiscal year 2018 to help fund our ongoing philanthropic endeavors, with an emphasis on the communities surrounding Brown-Forman’s headquarters in Louisville, KY. The Foundation's resources provide a consistent source of support for charitable giving independent of our annual earnings.
We created the Brown-Forman Foundation (the Foundation) in fiscal 2018 to help fund our ongoing philanthropic endeavors, with an emphasis on the communities surrounding Brown-Forman’s headquarters in Louisville, KY. The Foundation’s resources provide a consistent source of support for charitable giving independent of our annual earnings.
We do this through a combination of succession planning, planned learning, short-term assignments, international opportunities, and thoughtful talent management. Given our low turnover, we are intentional about moving employees through new roles, ensuring that they have the opportunity to learn new skills.
We do this through a combination of succession planning, planned learning, short-term assignments, international opportunities, and thoughtful talent management. Given our low voluntary turnover, we are intentional about moving employees through new roles, ensuring that they have the opportunity to learn new skills.
Our competitors include major global spirits and wine companies, such as Bacardi Limited, Becle S.A.B. de C.V., Davide Campari-Milano N.V., Diageo PLC, LVMH Moët Hennessy Louis Vuitton SE, Pernod Ricard SA, Rémy Cointreau, and Suntory Global Spirits.
Our competitors include major global spirits companies, such as Bacardi Limited, Becle S.A.B. de C.V., Davide Campari-Milano N.V., Diageo PLC, LVMH Moët Hennessy Louis Vuitton SE, Pernod Ricard SA, Rémy Cointreau, and Suntory Global Spirits.
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.
In the United States, which generally prohibits spirits and wine manufacturers from selling their products directly to consumers, we sell our products either to distributors or to state governments (in states that directly control alcohol sales) that then sell to retail customers and consumers.
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 from early childhood through adult learning.
Our partner organizations include AMPED, the 12 Louisville Central Community Center, the Louisville Urban League, Simmons College of Kentucky, and the West End School. Together, these organizations will advance educational opportunities from early childhood through adult learning.
Complying with these statutes and regulations has not materially impacted our capital expenditures, earnings, or competitive position, and is not expected to have a material impact during fiscal 2025. 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.
Complying with these statutes and regulations has not materially impacted our capital expenditures, earnings, or competitive position, and is not expected to have a material impact during fiscal 2026. 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.
We will make bold moves with a commitment to improve continuously as we work together to deliver sustained long-term growth. This Integrated Annual Report on Form 10-K for the fiscal year ended April 30, 2024, presents not only our financial performance but also our environmental, social, and governance strategies, commitments, and results.
We will make bold moves with a commitment to improve continuously as we work together to deliver sustained long-term growth. This Integrated Annual Report on Form 10-K for the fiscal year ended April 30, 2025, presents not only our financial performance but also our environmental, social, and governance strategies, commitments, and results.
From time to time, our agricultural ingredients (agave, barley, corn, grapes 1 , malted barley, molasses, rye, sugar, and wood) could be adversely affected by weather and other forces out of our control that might constrain supply or reduce our inventory below desired levels for optimum production. Whiskeys, certain tequilas, rums, and some other distilled spirits must be aged.
From time to time, our agricultural ingredients (agave, barley, corn, malted barley, molasses, rye, sugar, and wood) could be adversely affected by weather and other forces out of our control that might constrain supply or reduce our inventory below desired levels for optimum production. Whiskeys, certain tequilas, rums, and some other distilled spirits must be aged.
Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2024 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.
Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2025 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.
According to IWSR, for calendar year 2023, the ten largest global spirits companies controlled over 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.
According to IWSR, for calendar year 2024, the ten largest global spirits companies controlled over 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.
Jack Daniel's Country Cocktails in the United States are produced, sold, and distributed under our relationship with the Pabst Brewing Company. 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 with deep respect for our consumers.
Starting in 2021, Jack Daniel’s Country Cocktails in the United States are produced, sold, and distributed under our relationship with the Pabst Brewing Company. 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 with deep respect for our consumers.
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. Marshall B. Farrer 53 Executive Vice President, Chief Strategic Growth Officer since March 2024. Executive Vice President, Chief Strategic Growth Officer and President Europe from January 2023 to March 2024.
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. Marshall B. Farrer 54 Executive Vice President, Chief Strategic Growth Officer since March 2024. Executive Vice President, Chief Strategic Growth Officer and President Europe from January 2023 to March 2024.
Approximately 29%, 27%, and 28% of our reported net sales for fiscal 2022, fiscal 2023, and fiscal 2024, respectively, were in the fourth calendar quarter. 6 Competition Trade information indicates that we are one of the largest global suppliers of premium spirits.
Approximately 27%, 28%, and 29% of our reported net sales for fiscal 2023, fiscal 2024, and fiscal 2025, respectively, were in the fourth calendar quarter. 6 Competition Trade information indicates that we are one of the largest global suppliers of premium spirits.
Over the past four fiscal years, we faced a challenging, volatile environment, including supply chain disruptions and a global pandemic. Our employees' unique mix of agility, resilience, energy, and collaboration enabled us to succeed despite these challenges.
Over the past five fiscal years, we faced a challenging, volatile environment, including supply chain disruptions and a global pandemic. Our employees’ unique mix of agility, resilience, energy, and collaboration enabled us to succeed despite these challenges.
None of these raw materials are in short supply, but shortages could occur in the future.
None of these raw materials are currently in short supply, but shortages could occur in the future.
Carr, Jr. 44 Executive Vice President, General Counsel and Secretary since May 2024. Vice President, Associate General Counsel - Regional and Corporate Development from October 2022 to April 2024. Vice President, Associate General Counsel - Europe from May 2018 to October 2022. Vice President, Managing Attorney and Assistant Corporate Secretary from September 2013 to May 2018. Leanne D.
Carr, Jr. 45 Executive Vice President, General Counsel and Secretary since May 2024. Vice President, Associate General Counsel - Regional and Corporate Development from October 2022 to April 2024. Vice President, Associate General Counsel - Europe from May 2018 to October 2022. Vice President, Managing Attorney and Assistant Corporate Secretary from September 2013 to May 2018. Leanne D.
Senior Vice President, President Europe from August 2020 to January 2023. Senior Vice President, Managing Director, Global Travel Retail and Developed APAC Region from August 2018 to July 2020. Senior Vice President, Managing Director, Global Travel Retail from May 2015 to July 2018. Vice President, Managing Director, Jack Daniel’s Tennessee Honey from January 2014 to April 2015. Kirsten M.
Senior Vice President, President Europe from August 2020 to January 2023. Senior Vice President, Managing Director, Global Travel Retail and Developed APAC Region from August 2018 to July 2020. Senior Vice President, Managing Director, Global Travel Retail from May 2015 to July 2018. Vice President, Managing Director, Jack Daniel’s Tennessee Honey from January 2014 to April 2015. Christina M.
Cunningham 54 Executive Vice President and Chief Financial Officer since March 2023. Senior Vice President and Chief Financial Officer from July 2021 to March 2023. Senior Vice President, Shareholder Relations Officer, Global Commercial Finance, and Financial Planning and Analysis from August 2020 to July 2021. Senior Vice President, Shareholder Relations Officer from August 2019 to July 2020.
Cunningham 55 Executive Vice President and Chief Financial Officer since March 2023. Senior Vice President and Chief Financial Officer from July 2021 to March 2023. Senior Vice President, Shareholder Relations Officer, Global Commercial Finance, and Financial Planning and Analysis from August 2020 to July 2021. Senior Vice President, Shareholder Relations Officer from August 2019 to July 2020.
In December 2023, the Tennessee Forestry Association, supported by Jack Daniel’s, announced that it received a grant from the National Fish and Wildlife Federation to engage with family forest landowners on sustainable management practices to improve Tennessee’s shortleaf pine and white oak forests.
In addition, the Tennessee Forestry Association, supported by Jack Daniel’s, announced that it received a grant from the National Fish and Wildlife Federation to engage with family forest landowners on sustainable management practices to improve Tennessee’s shortleaf pine and white oak forests.
Woodford Reserve sold over 1.7 million nine-liter cases for the fiscal year ended April 30, 2024. 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.
Woodford Reserve sold over 1.8 million nine-liter cases for the fiscal year ended April 30, 2025. 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.
We refresh our Code of Conduct and certification annually and make them available in 12 languages. Investment and Sustainability For over a century and a half, we have learned 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.
We refresh our Code of Conduct and certification annually and make it available in 13 languages. Investment and Sustainability For over a century and a half, we have learned 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.
The table below shows the percentage of total reported net sales for our top markets in our three most recent fiscal years: Percentage of Total Reported Net Sales by Geographic Area Year ended April 30 2022 2023 2024 United States 49 % 47 % 45 % Mexico 5 % 6 % 7 % Germany 6 % 6 % 6 % Australia 6 % 5 % 5 % United Kingdom 6 % 5 % 4 % Other 28 % 31 % 32 % TOTAL 100 % 100 % 100 % Note: Totals may differ due to rounding For details about net sales in our top markets, see “Item 7.
The table below shows the percentage of total reported net sales for our top markets in our three most recent fiscal years: Percentage of Total Reported Net Sales by Geographic Area Year ended April 30 2023 2024 2025 United States 47 % 45 % 44 % Mexico 6 % 7 % 7 % Germany 6 % 6 % 6 % Australia 5 % 5 % 5 % United Kingdom 5 % 4 % 4 % Other 31 % 32 % 33 % TOTAL 100 % 100 % 100 % Note: Totals may differ due to rounding For details about net sales in our top markets, see “Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2024 Market Highlights.” For details about our reportable segment and for additional geographic information about net sales and long-lived assets, see Note 19 to the Consolidated Financial Statements in “Item 8.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2025 Market Highlights.” For details about our reportable segment and for additional geographic information about net sales and long-lived assets, see Note 20 to the Consolidated Financial Statements in “Item 8.
In 46 countries, we offer a third-party service to employees and others who choose to “speak up” anonymously. As we train our managers, we reinforce our commitment to non-retaliation and maintaining a “speak up” culture.
In countries where we operate, we offer a third-party service to employees and others who choose to “speak up” anonymously. As we train our managers, we reinforce our commitment to non-retaliation and maintaining a “speak up” culture.
In fiscal 2024, we met our target to engage with 100% of our direct farmers on regenerative agriculture practices, and will continue engaging with direct farmers in fiscal 2025. • Sustainable Forestry: In June 2023, the Jack Daniel Seed Orchard and our continued relationship with the University of Tennessee celebrated its 25th anniversary.
In fiscal 2024, we met our target to engage with 100% of our direct farmers on regenerative agriculture practices and continued engaging with direct farmers in fiscal 2025. • Sustainable Forestry: In fiscal 2024, the Jack Daniel Seed Orchard and our continued relationship with the University of Tennessee celebrated its 25th anniversary.
We will expand this collaboration in fiscal 2025 to begin measuring water risk in our supply chain and further enhance our water stewardship program. • Sustainable Agriculture: In June 2023, our Woodford Reserve Distillery announced a five-year commitment to purchase the rye grown by Kentucky farmers as part of the Rye in Kentucky research being led by the University of Kentucky.
We will expand this collaboration in fiscal 2026 to begin measuring water risk in our supply chain and further enhance our water stewardship program. • Sustainable Agriculture: In fiscal 2024, our Woodford Reserve Distillery announced a five-year commitment to purchase the rye grown by Kentucky farmers as part of the Rye in Kentucky research being led by the University of Kentucky.
The project is expected to become operational in fiscal 2025. • Water Stewardship: In fiscal 2024, we continued our work with Waterplan to improve the measurement of water- related risk at eight of our facilities and to identify opportunities for water efficiency improvements and water reuse at our Casa Herradura facility.
The project is expected to become operational in fiscal 2026. • Water Stewardship: In fiscal 2025, we continued our work with Waterplan to improve the measurement of water- related risk at our production facilities and to identify opportunities for water efficiency improvements and water reuse at our Casa Herradura facility.
What enables our success are the approximately 5,700 people (excluding individuals that work on a part-time or temporary basis) we employ in over 45 countries around the world. This includes approximately 3,600 salaried employees and 2,100 hourly employees, with the largest percentage of our employees residing within the United States, Mexico, and the United Kingdom.
What enables our success are the approximately 5,000 people (excluding individuals that work on a part-time or temporary basis) we employ in over 45 countries around the world. This includes approximately 3,300 salaried employees and 1,700 hourly employees, with the largest percentage of our employees residing within the United States, Mexico, and the United Kingdom.
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 fiscal year 2022, which is the 12 largest investment in its history.
As part of our commitment to be better and do better as neighbors, the Foundation made a 10-year, $50 million commitment to five organizations in west Louisville in fiscal 2022, which is the largest investment in its history.
We convey our compliance expectations to employees via our Code of Conduct, and our employees certify annually that they will comply with it and report potential violations. The Code of Conduct details expectations for 20 different risks; links to Q&A, policies, and training; and gives contact details for subject-matter experts.
We convey our compliance expectations to employees via our Code of Conduct, and our employees certify annually that they will comply with it and report potential violations. The Code of Conduct details our expectations with respect to different risks scenarios; provides links to Q&As, policies, and training; and gives contact details for subject-matter experts.
Moreover, taking an integrated approach means that many aspects of our company contribute to this value creation and are fundamental to our strategy, including our commitment to environmental sustainability, alcohol and marketing responsibility, diversity and inclusion, and to building communities in which we live and work. We call these efforts Living a Spirit of Commitment.
Moreover, taking an integrated approach means that many aspects of our company contribute to this value creation and are fundamental to our strategy, including our spirit of commitment to environmental sustainability, alcohol and marketing responsibility, culture and inclusion, and to building communities in which we live and work.
We employ approximately 5,700 people (excluding individuals who work on a part-time or temporary basis) on six continents, including approximately 2,600 people in the United States (approximately 13% of whom are represented by a union) and 1,100 people in Louisville, Kentucky, USA, home of our world headquarters.
We employ approximately 5,000 people (excluding individuals who work on a part-time or temporary basis) on six continents, including approximately 2,000 people in the United States (approximately 7% of whom are represented by a union) and 800 people in Louisville, Kentucky, USA, home of our world headquarters.
We expect them all to contribute meaningfully over the longer term. In addition, the acquisitions of Gin Mare (2022) and Diplomático (2023) provide us with leadership positions in the super-premium-and-above gin and rum categories, respectively, and we look to grow these brands globally. Our RTD portfolio continues to evolve globally.
In addition, the acquisitions of Gin Mare (2022) and Diplomático (2023) provide us with leadership positions in the super-premium-and-above gin and rum categories, respectively, and we look to grow these brands globally. Our RTD portfolio continues to evolve globally.
With this evolving strategy, we have a roadmap for continued progress over the next quarter-century. 11 Our continued investments in renewable energy and resource stewardship underscore our long-term focus: • Renewable Electricity: In fiscal 2024, we installed a rooftop solar system at our Newbridge bottling plant in Edinburgh, Scotland, in partnership with YLEM Energy, and our Slane Distillery signed a Corporate Power Purchase Agreement with Flogas Enterprise for renewable electricity from a wind farm in Ireland. • Byproducts to Energy: In fiscal 2024, construction continued on the anaerobic digester at the Jack Daniel Distillery that will convert a portion of the distillery byproducts to renewable energy and fertilizer.
With this evolving strategy, we have a roadmap for continued progress over the next quarter-century. 11 Our continued investments in renewable energy and resource stewardship underscore our long-term focus: • Renewable Electricity: In fiscal 2024, we installed a rooftop solar system at our Newbridge bottling plant in Edinburgh, Scotland, in partnership with YLEM Energy. • Byproducts to Energy: In fiscal 2025, construction continued on the anaerobic digester project at the Jack Daniel Distillery that will convert a portion of the distillery byproducts to renewable energy and fertilizer.
Principal Raw Materials Distilled Spirits Liqueurs RTD Products Wines 1 Packaging Agave Flavorings Carbon dioxide Grapes Aluminum cans Barley Neutral spirits Flavorings Wood Cartons Corn Sugar Malt Closures Malted barley Water Neutral spirits Glass bottles Molasses Whiskey Sugar Labels Rye Wine Tequila PET 2 bottles Sugar Water Water Whiskey Wood 1 Sonoma-Cutrer California Wines was divested on April 30, 2024. 2 Polyethylene terephthalate (PET) is a polymer used in non-glass containers.
Principal Raw Materials Distilled Spirits Liqueurs RTD Products Packaging Agave Flavorings Carbon dioxide Aluminum cans Barley Neutral spirits Flavorings Cartons Corn Sugar Malt Closures Malted barley Water Neutral spirits Glass bottles Molasses Whiskey Sugar Labels Rye Wine Tequila PET 1 bottles Sugar Water Water Whiskey Wood 1 Polyethylene terephthalate (PET) is a polymer used in non-glass containers.
Different Jack Daniel's expressions have brought new consumers to the franchise, including Jack Daniel's Tennessee Honey (2011), Jack Daniel's Tennessee Fire (2015), Jack Daniel's Tennessee Apple (2019), Jack Daniel's Bonded Tennessee Whiskey and Triple Mash Blended Straight Whiskey (2022), and our most recent launches, Jack Daniel’s Bonded Tennessee Rye Whiskey and Jack Daniel’s American Single Malt (2023), which individually and collectively add great value to the company and to our consumers the world over.
Different Jack Daniel’s expressions have brought new consumers to the franchise, including Jack Daniel’s Tennessee Honey (2011), Jack Daniel’s Tennessee Fire (2015), Jack Daniel’s Tennessee Apple (2019), Jack Daniel’s 10 Year Old (2021), Jack Daniel’s Bonded Tennessee Whiskey and Triple Mash Blended Straight Whiskey (2022), Jack Daniel’s Bonded Rye - Tennessee Rye Whiskey, Jack Daniel’s American Single Malt, and Jack Daniel’s 12 Year Old (2023), Jack Daniel’s Single Barrel - Barrel Proof Rye (2024), and our most recent launch, Jack Daniel’s 14 Year Old (2025), which individually and collectively add great value to the company and to our consumers the world over.
Senior Vice President, Chief Global Supply Chain and Technology Officer from March 2022 to March 2023. 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. Yiannis Pafilis 53 Executive Vice President and President, Europe since March 2024.
Nall 54 Executive Vice President, Chief Global Supply Chain and Technology Officer since March 2023. Senior Vice President, Chief Global Supply Chain and Technology Officer from March 2022 to March 2023. 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. Diane F.
Vice President and Chief Diversity Officer from February 2022 to June 2022. Vice President and Human Resources Director - Global Production, Diversity and Inclusion from March 2021 to January 2022. Vice President and Human Resources Director - Global Production from August 2017 to February 2021.
Senior Vice President, Chief Inclusion and Global Community Relations Officer from June 2022 to March 2023. Vice President and Chief Diversity Officer from February 2022 to June 2022. Vice President and Human Resources Director - Global Production, Diversity and Inclusion from March 2021 to January 2022.
In these owned-distribution markets, and in a large portion of the Travel Retail channel, we sell our products directly to retailers or wholesalers. In many other markets, we rely on third parties to distribute our brands, generally under fixed-term distribution contracts. In Canada, we sell our products to provincial governments.
Effective May 1, 2025, we launched our own distribution company in Italy. In these owned-distribution markets, and in a large portion of the Travel Retail channel, we sell our products directly to retailers or wholesalers. In many other markets, we rely on third parties to distribute our brands, generally under fixed-term distribution contracts.
The United States, our most important market, accounted for 45% of our net sales in fiscal 2024 and the other 55% were outside of the United States.
The United States, our most important market, accounted for 44% of our net sales in fiscal 2025, and the other 56% were outside of the United States.
Despite the cyclical cost pressures of agave, we remain committed to 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 The Glendronach, Benriach, and Glenglassaugh, and our Irish whiskey, Slane, are well-positioned in their respective categories.
We remain committed to 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 The Glendronach, Benriach, and Glenglassaugh, and our Irish whiskey, Slane, are well positioned in their respective categories. We expect them all to contribute meaningfully over the longer term.
All roles are priced based on compensation survey data for the market where the employee resides. We will continue to refresh our data and monitor pay equity annually. Talent Development We continually seek opportunities to develop our employees to ensure that we have the capabilities to grow our business.
All roles are priced based on external compensation survey data for the market where the employee resides. We refresh our external data annually and monitor pay equity at least annually or when positions become open in a given market. Talent Development We continually seek opportunities to develop our employees to ensure we have the capabilities to grow our business.
Vice President, General Manager of Germany and Czechia from September 2017 to July 2020. General Manager of Russia from July 2014 to August 2017. Crystal L. Peterson 53 Executive Vice President, Chief Inclusion and Global Community Relations Officer since March 2023. Senior Vice President, Chief Inclusion and Global Community Relations Officer from June 2022 to March 2023.
Vice President, General Manager of Germany and Czechia from September 2017 to July 2020. General Manager of Russia from July 2014 to August 2017. 14 Name Age Principal Occupation and Business Experience Crystal L. Peterson 54 Executive Vice President, Chief Inclusion and Global Community Relations Officer since March 2023.
We believe our employee relations are good and our turnover rate is low. Total Rewards We strive to pay our employees fairly and competitively. Each fiscal year, we review the compensation for all salaried roles both internally and externally, ensuring that every employee is paid fairly compared to each other and competitively against the market.
We believe our employee engagement is high, tenure is above average, and our voluntary turnover rate is low. Total Rewards We pay our employees fairly and competitively. Each fiscal year, we review the compensation for all salaried roles both internally and externally, ensuring every employee is paid fairly compared to the work they do and competitively against the external market.
No other customer accounted for 10% or more of our consolidated net sales in fiscal 2024. Seasonality Holiday buying makes the fourth calendar quarter the peak season for our business.
In fiscal 2025, our two largest customers accounted for approximately 13% and 11% of consolidated net sales, respectively. No other customer accounted for 10% or more of our consolidated net sales in fiscal 2025. Seasonality Holiday buying makes the fourth calendar quarter (generally our third fiscal quarter) the peak season for our business.
This civic engagement, as well as our philanthropic contributions, further promotes Brown-Forman’s caring culture and commitment to the community. We continue to expand our civic engagement in Brown-Forman global office locations, allowing those employees closest to the needs of their communities to decide how to invest their charitable-giving resources.
We continue to expand our community engagement in Brown-Forman global office locations, allowing those employees closest to the needs of their communities to decide how to invest their volunteer time and charitable-giving resources.
More direct connection with customers and consumers enabled through owned distribution is an important part of our strategic growth. 1 IWSR 2023 Data 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, perspectives, and mindsets within our own workforce is essential.
In May 2025, we established our owned-distribution organization in Italy. 1 IWSR 2024 Data 10 People, Culture, Ethics, and Compliance As we work to increase our brands’ relevance and appeal to diverse consumer groups around the world, we believe a diversity of experiences, perspectives, and mindsets within our own workforce is essential.
Although some competitors have substantially greater resources than we do, we believe that our competitive position is strong, particularly as it relates to brand awareness, quality, availability, and relevance of new product introductions.
Although some competitors have substantially greater resources than we do, we believe that our competitive position is strong, particularly as it relates to brand awareness, quality, availability, and relevance of new product introductions. Ingredients and Other Supplies The principal raw materials used in manufacturing and packaging our distilled spirits, liqueurs, and RTD products are shown in the table below.
We believe that our customer relationships are good and that 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 2024, our two largest customers accounted for approximately 13% and 11% of consolidated net sales, respectively.
In Canada, we sell our products to provincial governments. We believe that our customer relationships are good and that 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.
Workforce Stability We have historically enjoyed low turnover among our salaried population and continue to track our departures, given the acceleration in the job market in recent years. We analyze our quantitative and qualitative attrition data each quarter, and our voluntary turnover among salaried employees remains consistent with our historical levels.
Workforce Stability We continue to experience low voluntary turnover among our salaried population. We analyze our quantitative and qualitative attrition data regularly, and our voluntary turnover among salaried employees remains consistent with our historical levels.
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.
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.
These platforms cover a wide spectrum of activities, including media advertising (TV, radio, print, outdoor, digital, and social), consumer and trade promotions, sponsorships, and visitors' center programs at our distilleries.
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, and social), consumer and trade promotions, sponsorships, and visitors’ center programs at our distilleries.
Executive Vice President and Chief Brands and Strategy Officer from February 2015 to September 2017. Senior Vice President and Chief Brands Officer from January 2013 to January 2015. Matias Bentel 49 Executive Vice President and Chief Brands Officer since March 2023. Senior Vice President and Chief Brands Officer from January 2020 to March 2023.
Whiting 56 President and Chief Executive Officer since January 2019. Executive Vice President and Chief Operating Officer from October 2017 to December 2018. Executive Vice President and Chief Brands and Strategy Officer from February 2015 to September 2017. Senior Vice President and Chief Brands Officer from January 2013 to January 2015. Michael E.
We will continue to monitor our data carefully. 13 Executive Officers Information about Our Executive Officers The following persons served as executive officers as of June 14, 2024: Name Age Principal Occupation and Business Experience Lawson E. Whiting 55 President and Chief Executive Officer since January 2019. Executive Vice President and Chief Operating Officer from October 2017 to December 2018.
We will continue to monitor our data carefully to ensure that we identify trends related to attraction, retention, and engagement of our workforce globally. 13 Executive Officers Information about Our Executive Officers The following persons served as executive officers as of June 13, 2025: Name Age Principal Occupation and Business Experience Lawson E.
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. 14 Name Age Principal Occupation and Business Experience Jeremy J. Shepherd 49 Executive Vice President, President USA & Canada since March 2023.
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. Jeremy J.
Senior Vice President, President USA & Canada from July 2022 to March 2023. Vice President, General Manager for the United Kingdom & Ireland from January 2018 to July 2022. Vice President Director Midwest Division from May 2015 to December 2017. Portfolio Integration Director from September 2014 to May 2015. Kelli N.
Shepherd 50 Executive Vice President, Chief Marketing Officer since January 2025. Executive Vice President, President USA & Canada from March 2023 to January 2025. Senior Vice President, President USA & Canada from July 2022 to March 2023. Vice President, General Manager for the United Kingdom & Ireland from January 2018 to July 2022.
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.
We work to partner with organizations that support our key focus areas: amplify arts and culture, invest in lifelong learning, and cultivate community.
Our goals broaden our focus beyond business operations to include our supply chain, where the majority of our environmental footprint resides.
In fiscal 2025, we revised our 2030 Sustainability Strategy to account for our current organization and to align our efforts with industry best practices and the most current climate science. Our goals broaden our focus beyond business operations to include our supply chain, where the majority of our environmental footprint resides.
Hawley 54 Executive Vice President, Chief People, Places, and Communications Officer since March 2023. Senior Vice President, Chief People, Places, and Communications Officer from May 2021 to March 2023. 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.
Nguyen 54 Executive Vice President Chief People Places and Communications Officer since August 2024. Vice President Human Resources Director - Global Commercial/Corporate Teams from February 2022 to August 2024. Vice President Human Resources Director, Global Commercial Organization from August 2020 to February 2022. Vice President Human Resources Director, Regions from August 2018 to August 2020.
Brown 54 Senior Vice President and Chief Accounting Officer since August 2018. Vice President and Director Finance (North America Region) from May 2015 to August 2018. Director NAR Division Finance (North America Region) from November 2013 to April 2015. Available Information Our website address is www.brown-forman.com.
Vice President Director Midwest Division from May 2015 to December 2017. Portfolio Integration Director from September 2014 to May 2015. Available Information Our website address is www.brown-forman.com.
One of the main drivers of our inclusive culture is the continued growth and leadership of our ten Employee Resource Groups (ERGs).
We believe this will make us a better employer, help us build iconic brands, and make us a more sustainable business. One of the main drivers of our inclusive culture is the continued growth and leadership of our ten Employee Resources Groups (ERGs), which are open to all employees.
Community We believe we are a responsible and caring corporate citizen and invest in the communities where employees live and work. We encourage employees to participate in philanthropic outreach efforts by giving their time and talents to support those non-profit organizations most meaningful to them.
Community We strive to be a responsible and caring corporate citizen and invest in the communities where employees live and work. We encourage employees to participate in philanthropic outreach efforts through company-led volunteer projects and nonprofit board service. This employee engagement, as well as our philanthropic contributions, further promote Brown-Forman’s caring culture and commitment to community.
Senior Vice President and President for Europe, North Asia, and ANZSEA from February 2015 to June 2018. Senior Vice President and Managing Director for Europe from January 2013 to January 2015. Timothy M. Nall 53 Executive Vice President, Chief Global Supply Chain and Technology Officer since March 2023.
Vice President Finance Director, Developed Europe and International Strategy from August 2018 to August 2020. Vice President, Director Corporate Strategy and Business Development from February 2015 to August 2018. Vice President, Director Global Business Strategy and Analysis for Jack Daniel’s from January 2013 to February 2015. Timothy M.
Removed
The most important and iconic brand in our portfolio is Jack Daniel’s Tennessee Whiskey, the #1 selling American whiskey in the world. 1 Jack Daniel’s Tennessee Whiskey was recently named the most valuable spirits brand in the world in the 2023 Interbrand “Best Global Brands” rankings, and the newly released Glenglassaugh Sandend was named the “2023 Whisky of the Year” by Whisky Advocate .
Added
The most important and iconic brand in our portfolio is Jack Daniel’s Tennessee Whiskey, the #1 selling American whiskey in the world. 1 Within the Jack Daniel’s portfolio, our super-premium offerings, Jack Daniel’s Triple Mash Blended Straight Whiskey and Jack Daniel’s 12 Year Old, received World’s Best Awards from the World Whiskey Awards 2025.
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We sell Korbel products under contract in the United States and other select markets. 7 Sonoma-Cutrer California Wines was divested on April 30, 2024. 8 Finlandia Vodka was divested on November 1, 2023. 9 Comprises all expressions of this brand. See “Item 7.
Added
On May 9, 2025, the Company announced the end of the sales, marketing, and distribution relationship, effective June 30, 2025. 6 Comprises all expressions of this brand. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2025 Brand Highlights” for brand performance details.
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Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Fiscal 2024 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.
Added
Outside the United States, our improved routes to consumers continue to increase our competitiveness. Owned distribution enables us to have a more direct connection with customers and consumers, and is an important part of our strategic growth.
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Ingredients and Other Supplies The principal raw materials used in manufacturing and packaging our distilled spirits, liqueurs, RTD products, and wines 1 are shown in the table below.
Added
Our strategy is to embed inclusion into everything we do. We prioritize initiatives that help us build a workforce that reflects our global consumers, create a culture of inclusion, retain and expand our consumer base, and be a good neighbor in our communities.
Removed
Outside the United States, our improved routes to consumers continue to increase our competitiveness. In fiscal 2024, we established our owned-distribution organizations in Japan and Slovakia; and announced plans to distribute our own brands in Italy, effective May 1, 2025.
Added
We track all internal movement and believe that we are providing an appropriate level of growth and development for our employees. Culture & Inclusion We believe an inclusive organization can attract stronger talent, generate more innovative thinking, and build brands that resonate with a broad spectrum of consumers, ultimately leading to enhanced business performance.
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Our vision is to create an environment where leveraging diversity and fostering inclusion occurs naturally, giving us a sustainable marketplace advantage.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

62 edited+18 added−19 removed90 unchanged
Biggest changeProduct recalls or other product liability claims could materially and adversely affect our sales. The success of our brands depends on the positive image that consumers have of them. We could decide to or be required to recall products due to suspected or confirmed product contamination, product tampering, spoilage, regulatory non-compliance, food safety issues, or other quality issues.
Biggest changeWe could decide to or be required to recall products due to suspected or confirmed product contamination, product tampering, spoilage, regulatory non-compliance, food safety issues, or other quality issues. Any of these events could adversely affect our financial results.
These shifts in consumption and purchasing channels could adversely impact our profitability. Consumers also may begin to prefer the products of competitors or may generally reduce their demand for brands produced by larger companies. Over the past several decades, the number of small, local distilleries in the United States has grown significantly.
These shifts in consumption and purchasing channels could adversely impact our profitability. Consumers may also begin to prefer the products of competitors or may generally reduce their demand for brands produced by larger companies. Over the past several decades, the number of small, local distilleries in the United States has grown significantly.
Specifically, governments could prohibit, impose, or increase limitations on advertising and promotional activities, or times or locations where beverage alcohol may be sold or consumed, or adopt other measures that could limit our opportunities to reach consumers or sell our products. Some countries historically have banned all television, newspaper, magazine, and digital commerce/advertising for beverage alcohol products.
Specifically, governments could prohibit or impose or increase limitations on advertising and promotional activities, or times or locations where beverage alcohol may be sold or consumed, or adopt other measures that could limit our opportunities to reach consumers or sell our products. Some countries historically have banned all television, newspaper, magazine, and digital commerce/advertising for beverage alcohol products.
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 22 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.
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.
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 stockholders, 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.
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 stockholders, operations, current or anticipated business performance, or environmental, social, or governance 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.
If any of our key suppliers were no longer able to meet our timing, quality, or capacity requirements, ceased doing business with us, or significantly raised prices, and we could not promptly develop alternative cost-effective sources of supply or production, our operations and financial results could suffer.
Likewise, our operations and financial results could suffer if any of our key suppliers were no longer able to meet our timing, quality, or capacity requirements, ceased doing business with us, or significantly raised prices, and we could not promptly develop alternative cost-effective sources of supply or production.
Weather, acute or chronic climate change impacts, fires, diseases, and other agricultural uncertainties that affect the health, yield, quality, or price of the various raw materials used in our products also present risks for our business, including in some cases potential impairment in the recorded value of our inventory.
Weather, acute or chronic climate change impacts, floods, fires, diseases, and other agricultural uncertainties that affect the health, yield, quality, or price of the various raw materials used in our products also present risks for our business, including in some cases potential impairment in the recorded value of our inventory.
In many markets outside the United States, we sell our products and pay for some goods, 20 services, and labor costs 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.
In many markets outside the United States, we sell our products and pay for some goods, services, and labor costs 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.
Increasing regulation of greenhouse gas emissions could increase the cost of energy, including fuel, required to operate our facilities or transport and distribute 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.
Increasing regulation of greenhouse gas emissions could increase the cost of energy, including fuel, required to operate our facilities or transport and distribute our products, thereby substantially increasing the production, distribution, and supply chain costs associated with our products. 21 Tax increases and changes in tax rules could adversely affect our financial results.
And the difference in voting rights for our common 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.
And the difference in voting rights for our common stock 24 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.
Product innovation, particularly for our core brands, is a significant element of our growth strategy; however, there can be no assurance that we will continue to develop and implement successful line extensions, packaging, formulation or flavor changes, or new products.
Product innovation, particularly for our 17 core brands, is a significant element of our growth strategy; however, there can be no assurance that we will continue to develop and implement successful line extensions, packaging, formulation or flavor changes, or new products.
As a result, consumers may begin to shift their consumption and purchases from our premium and super-premium products, or away from alcoholic beverages entirely. This shift includes consumption at home as a result of various factors, including shifts in social trends, and shifts in the channels for the purchases of our products.
As a result, consumers may begin to shift their consumption and purchases away from our premium and super-premium products, or away from alcoholic beverages entirely. This shift further includes consumption at home as a result of various factors, including shifts in social trends and shifts in the channels for the purchases of our products.
Changes in laws, regulatory measures, or governmental policies, or the manner in which current ones are interpreted, could subject us to governmental investigations, cause us to incur material additional costs or liabilities, and jeopardize the growth of our business in the affected market.
Changes in laws, regulatory measures, or governmental policies, or the manner in which current ones are interpreted or enforced, could subject us to governmental investigations, cause us to incur material additional costs or liabilities, and jeopardize the growth of our business in the affected market.
Our business is sensitive to changes in both direct and indirect taxes. New tax rules, accounting standards or pronouncements, and changes in interpretation of existing rules, standards, or pronouncements could have a material adverse effect on our business and financial results.
Our business is sensitive to changes in both direct and indirect taxes. New tax rules, accounting standards or pronouncements, and changes in the interpretation of existing rules, standards, or pronouncements could have a material adverse effect on our business and financial results.
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 depends substantially on the continued health of the Jack Daniel's family of brands.
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 depends substantially on the continued health of the Jack Daniel family of brands.
Additional regulation of this nature could substantially reduce 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 the risks and impacts of climate change, use of water, and other environmental and social issues could increase our operating costs.
Additional regulation of this nature could substantially reduce consumer awareness of our products in the affected markets and make introducing new products more challenging. Additional regulation in the United States and other countries addressing the risks and impacts of climate change, use of water, and other environmental and social issues could increase our operating costs.
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.
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 earnings.
Our ability to make and sell our products depends on 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 and package them. Without sufficient quantities of one or more key materials, our business and financial results could suffer.
Our ability to make and sell our products depends on the availability of the raw materials, product ingredients, finished products, oak barrels, glass and PET bottles, cans, bottle closures, packaging, and other materials used to produce and package them. Without sufficient quantities of one or more key materials, our business and financial results could suffer.
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 of beverage alcohol.
For example, attention remains 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 of beverage alcohol.
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. Expansion into new product categories by other suppliers, or innovation by new entrants into the market, could increase competition in our product categories.
In addition, we could experience unfavorable business results if we fail to attract consumers from diverse backgrounds and ethnicities in all our markets. Expansion into new product categories by other suppliers, or innovation by new entrants into the market, could increase competition in our product categories.
Transitioning from a third-party 15 distribution model to an owned-distribution model involves a significant undertaking, and subjects us to risks associated with that geographic region. If we are unsuccessful in our route-to-consumer strategies, including any transition to owned distribution, the sale and marketing of our products could be disrupted.
Transitioning from a third-party distribution model to an owned-distribution model involves a significant undertaking, and subjects us to additional operational and execution risks associated with that geographic region. If we are unsuccessful in our route-to-consumer strategies, including any transition to owned distribution, the sale and marketing of our products could be disrupted.
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 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.
Given changing demographics, immigration laws and policies, remote working trends, and demand for talent globally, we may not be able to find the people with the right skills, at the right time, and in the right location, to achieve our business objectives. Risks Related to Our Global Operations Our global business is subject to commercial, political, and financial risks.
Given changing demographics, immigration laws and policies, and demand for talent globally, we may not be able to find the people with the right skills, at the right time, and in the right location, to achieve our business objectives. 20 Risks Related to Our Global Operations Our global business is subject to commercial, political, and financial risks.
Significant damage to the brand equity of 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 or sustained 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.
Significant damage to the brand equity of 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 or sustained decline in sales of our Jack Daniel’s products, as a result of negative publicity or otherwise, would have a negative effect on our financial results.
While past cyberattacks and hacking activities have not materially impacted our business or disrupted our operations, 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 and availability of our IT systems, networks, and services, including those that are managed, hosted, provided, or used by third parties, as well as the confidentiality, availability, and integrity of our data and the data of our customers, partners, consumers, employees, stockholders, suppliers, and others.
While past cyberattacks and hacking activities have not materially impacted our business or disrupted our operations, increased IT security threats and more sophisticated cybercrimes and 23 cyberattacks, including computer viruses and other malicious codes, ransomware, unauthorized access attempts, denial-of-service attacks, phishing, the use of deepfakes to spread misinformation or for scamming purposes, social engineering, hacking, and other types of attacks, pose a risk to the security and availability of our IT systems, networks, and services, including those that are managed, hosted, provided, or used by third parties, as well as the confidentiality, availability, and integrity of our data and the data of our customers, partners, consumers, employees, stockholders, suppliers, and others.
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 the availability of our products relating to the content or perceived adverse health consequences of some of our products.
Various jurisdictions have adopted or may seek to adopt significant additional product labeling or warning requirements or impose limitations on the availability of our products relating to the content or perceived adverse health consequences of some of 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 and after transition periods, because our brands might represent a smaller portion of the new business portfolio. Furthermore, consolidation of distributors may lead to the erosion of margins.
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 because our brands might represent a smaller portion of the new business portfolio. Furthermore, consolidation of distributors may lead to the erosion of margins.
Higher costs or insufficient availability of suitable grain, agave, water, molasses, wood, glass, closures, and other input materials, or higher associated labor costs or insufficient availability of labor, may adversely affect our financial results. Similarly, when energy costs rise, our transportation, freight, and other operating costs, such as distilling and bottling expenses, also may increase.
Higher costs or insufficient availability of suitable grain, agave, water, molasses, oak barrels, glass, closures, and other input materials, or higher associated labor costs or insufficient availability of labor, could adversely affect our financial results. 18 Similarly, when energy costs rise, our transportation, freight, and other operating costs, such as distilling and bottling expenses, also could increase.
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.
A cyber breach, a failure or corruption of one or more of our key IT systems, networks, processes, associated sites, or service providers, or a failure to comply with personal data privacy laws could have a material adverse impact on our business.
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 acceptable prices and terms.
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 acceptable prices and terms.
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 changes that affect the effective corporate income tax rate.
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 changes that affect the corporate income tax rate. As of January 2025, the change in U.S. presidential administration and control of U.S.
Our freight cost and the timely delivery of our products could be adversely affected by a number of factors, including driver or equipment shortages, higher fuel costs, weather conditions, traffic congestion, ocean freight lane disruptions, shipment container availability, rail shutdowns, increased government regulation, and other matters that could reduce the profitability of our operations.
Our freight cost and the timely delivery of our products could be adversely affected by a number of factors, including driver or equipment shortages, higher fuel costs, weather conditions, traffic congestion, ocean freight lane disruptions, shipment container availability, rail shutdowns, customs importation delays, and increased government regulation.
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.
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 and consumer spending, thus reducing consumer demand for our products and sales of used barrels.
Even if a product liability 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.
Even if a product liability 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. Our failure to attract or retain key talent could adversely affect our business.
Stakeholders and others 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.
Stakeholders and others 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.
If future scientific research indicates more widespread 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.
If future scientific research indicates more widespread 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, warning requirements, or limitations on the availability of our products could inhibit sales of affected products.
Additionally, investor advocacy groups, institutional investors, other market participants, stockholders, employees, consumers, customers, influencers, and policymakers have focused increasingly on the environmental, social, and governance or “sustainability” 19 positions and practices of companies.
Additionally, investor advocacy groups, institutional investors, other market participants, stockholders, employees, consumers, customers, influencers, and policymakers have focused increasingly on the environmental, social, and governance or “sustainability” positions and practices of companies, with particular emphasis on diversity, equity, and inclusion efforts.
Unauthorized access to our IT network, or that of our service providers, suppliers, customers, or other direct or indirect business partners, could result in failure of our IT systems, networks, or services to function properly.
Unauthorized access or other cyber-related interruptions to our IT infrastructure, or those of our service providers, suppliers, customers, or other direct or indirect business partners, could result in failure of our IT systems, networks, or services to function properly.
The OECD and implementing countries are expected to continue to revise their legislation and release additional guidance. We continue to evaluate the potential impact of the developments on our consolidated financial statements and related disclosures and based on our preliminary calculations, we do not expect the impact to be material.
The OECD and implementing countries are expected to continue to revise their legislation and release additional guidance. We continue to evaluate the potential impact of the developments on our consolidated financial statements and related disclosures.
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 February 2021, the European Union published its Europe Beating Cancer Plan.
Several such labeling regulations or laws require warnings on any product with substances that the 22 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.
Our business, operations, cash flows, and financial results have previously been, and in the future could be, impacted by health epidemics, pandemics, and similar outbreaks, such as the COVID-19 pandemic.
Our business faces various risks related to health epidemics and pandemics 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 previously been, and in the future could be, impacted by health epidemics, pandemics, and similar outbreaks, such as the COVID-19 pandemic.
Any of these events could adversely affect our financial results. Actual contamination, whether deliberate or accidental, could lead to inferior product quality and even illness, injury, or death of consumers, potential liability claims, and material loss.
Actual contamination, whether deliberate or accidental, could lead to inferior product quality and even illness, injury, or death of consumers, potential liability claims, and material loss.
As governmental entities look for increased sources of 21 revenue, they may increase taxes on beverage alcohol products. In fiscal 2024, we have observed excise tax increases in markets that include France, Portugal, Romania and Türkiye. Additionally in fiscal 2024, Australia has continued to make an annual increase in excise taxes based on the consumer price index.
As governmental entities look for increased sources of revenue, they may increase taxes on beverage alcohol products. In fiscal 2025, we have observed excise tax increases in several markets, including Canada, Czechia, France, Türkiye, and the United Kingdom. Additionally, in fiscal 2025, Australia continued to make an annual increase in excise taxes based on the consumer price index.
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.
International or domestic geopolitical or other events, including the imposition of 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. Additionally, changes in global grain and commodity pricing and availability may impact the markets where we operate.
The adoption of these or other proposals could have a material adverse impact on our net income and cash flows in the future. Furthermore, changes in the earnings mix or applicable foreign tax laws could also negatively impact our net income and tax flows.
We currently do not expect the impact to be material based on available guidance; however, the adoption of these or other proposals could have a material adverse impact on our net income and cash flows in the future. Furthermore, changes in the earnings mix or applicable foreign tax laws could also negatively impact our net income.
We could also encounter difficulty in finding buyers on acceptable terms in a timely manner, which could delay accomplishment of our strategic objectives. Expected cost savings from reduced overhead, relating to the sold assets, may not materialize. The overhead reductions could temporarily disrupt our other business operations.
In selling assets or businesses, 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 accomplishment of our strategic objectives. Expected cost savings from reduced overhead, relating to the sold assets, may not materialize.
As a result, we may experience material disruptions or suffer material adverse effects in the future from cyberattacks or other hacking activities. Furthermore, our increasingly mobile, hybrid, and global workforce further increases our attack surface.
As a result, we may experience material disruptions or suffer material adverse effects in the future from cyberattacks or other hacking activities. Furthermore, our increasingly mobile, hybrid, and global workforce, coupled with new technology like generative artificial intelligence, further increases our exposure to cyber risk.
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, beneficiaries of employees or former employees, customers, and consumers. As a result, we are subject to various U.S. federal and state and foreign laws and regulations relating to personal data.
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, beneficiaries of employees or former employees, customers, and consumers globally.
If extended droughts become more common or severe, or if our water supply is interrupted for other reasons, high-quality water could become scarce in some key production regions for our products,which in turn could adversely affect our business and financial results. We might not succeed in our strategies for investments, acquisitions, dispositions, and other strategic transactions.
If extended droughts become more common or severe, or if our water supply is interrupted for other reasons such as government intervention, high-quality water could become scarce in some key production regions for our products, which in turn could adversely affect our business and financial results. Unfavorable economic conditions could negatively affect our operations and results.
Dual-class share structures have come under the scrutiny of major indices, institutional investors, and proxy advisory firms, with some calling for the reclassification of non-voting common stock.
We have had two classes of common stock since 1959, when our stockholders approved the issuance of two shares of Class B non-voting common stock to every holder of our voting common stock. Dual-class share structures have come under the scrutiny of major indices, institutional investors, and proxy advisory firms, with some calling for the reclassification of non-voting common stock.
We believe that new products, line extensions, label and bottle changes, product reformulations, and similar product innovations by both our competitors and us will increase competition in our industry.
To continue to succeed, we must anticipate or react effectively to shifts in demographics, our competition, consumer behavior, consumer preferences, drinking tastes, and drinking occasions. We believe that new products, line extensions, label and bottle changes, product reformulations, and similar product innovations by both our competitors and us will increase competition in our industry.
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 16 international markets.
In our non-U.S. markets, we use a variety of route-to-consumer models, and, in many markets, we rely on third parties to distribute, market, and sell our products. As of May 1, 2025, we owned and operated 17 distribution companies in 18 countries.
Further, because whiskeys, rums, 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.
A catastrophic event causing physical damage, disruption, or failure at any one of our major distillation or bottling facilities could adversely affect our business. Further, because whiskeys, rums, 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.
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.
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. Inability of our primary glass provider to produce sufficient quantities to meet our needs would increase our cost to produce and constrain supply of some of our products.
We have in the past, and could in the future, incur restructuring charges or record impairment losses on the value of goodwill or other intangible assets resulting from previous acquisitions, or the risk of potential losses on equity investments which may also negatively affect our financial results.
We have in the past, and could in the future, incur restructuring charges or record impairment losses on the value of intangible assets resulting from previous acquisitions. From time to time, we also consider disposing of assets or businesses that may no longer meet our financial or strategic objectives.
Our business is subject to extensive regulatory requirements regarding production, exportation, importation, marketing and promotion, labeling, distribution, pricing, and trade practices, among others.
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.
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.
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.
Additionally, if we are not 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.
Additionally, if we are not 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. 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.
To remain competitive, we must be agile and efficient in adopting digital technologies and building analytical capabilities, which our competitors 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.
To remain competitive, we must be agile and efficient in adopting digital technologies and building analytical capabilities, which our competitors may be able to achieve with more agility and resources. 16 We are subject to risks from changes to the trade policies, tariffs, and import and export regulations of the U.S. and foreign governments.
Accordingly, a future widespread health epidemic or pandemic could materially and adversely affect our business, our operations, our cash flows, and our financial results. Unfavorable economic conditions could negatively affect our operations and results.
Accordingly, a future widespread health epidemic or pandemic could materially and adversely affect our business, operations, cash flows, and financial results. Product recalls or other product liability claims could materially and adversely affect our sales. The success of our brands depends on the positive image that consumers have of them.
While we do not currently expect our production operations to be directly impacted by conflicts around the world, changes in global grain and commodity pricing and availability may impact the markets where 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.
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.
Our glass supply, as well as global supply chains, have stabilized. However, similar supply chain challenges may occur in the future, making it difficult and more expensive to produce and deliver our products.
If supply chain challenges occur in the future, with respect to glass, oak barrels, or other key materials or ingredients that we purchase from suppliers, it would be difficult and more expensive to produce and deliver our products.
Removed
Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Fiscal 2024 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.
Added
Changes in the import and export policies, including trade restrictions, new or increased tariffs or quotas, embargoes, sanctions and countersanctions, safeguards, or customs restrictions by the United States and foreign governments, could require us to change the way we conduct business and negatively affect our business performance, financial condition, results of operations, and our relationships with customers, suppliers, and employees.
Removed
To continue to succeed, we must anticipate or react effectively to shifts in demographics, our competition, consumer behavior, consumer preferences, drinking tastes, and drinking occasions. 16 Our long-term plans call for the continued growth of the Jack Daniel's family of brands.
Added
Likewise, changes in laws and policies governing foreign trade, manufacturing, development, and investment in the territories or countries where we currently sell our products or conduct our business could adversely affect our business.
Removed
If these plans do not succeed, or if we otherwise fail to develop or implement effective business, portfolio, and brand strategies, our growth, business, or financial results could suffer. More broadly, if consumers shift away from spirits (particularly brown spirits such as American whiskey and bourbon), our premium-priced brands, or our ready-to-drink products, our financial results could be adversely affected.
Added
The United States has announced and/or implemented significant new tariffs on imports from a wide range of countries, which has prompted retaliatory tariffs by a number of countries and a cycle of retaliatory tariffs by both the United States and other countries.
Removed
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.
Added
In early April 2025, actions were taken by the United States and certain other countries to delay the effective date of certain of these tariffs, but as of the date of this report, a number of new tariffs remain in effect. These actions have, and are expected to continue to, result in retaliatory measures on U.S. goods.
Removed
During the recent global supply chain challenges, our primary glass provider could not produce sufficient quantities to meet our needs, which increased our cost 17 to produce, constrained supply of some of our products, and adversely affected our financial results. In response to these events, we took action to diversify suppliers of our raw materials, including glass.
Added
For example, in March 2025, several Canadian provinces removed all American beverage alcohol from store shelves, including Jack Daniel’s, in response to the United States announcing a 25% tariff on goods imported from Canada.
Removed
For example, a disruption in the supply of American white oak logs, staves, heading, or steel it could constrain our ability to produce or procure the new charred oak barrels in which we age our whiskeys.
Added
If maintained, the newly announced tariffs and the potential escalation of trade disputes could pose a significant risk to our business, including an increase to the cost of our products and, to the extent we absorb the costs of tariffs and do not pass them through to our customers, higher cost of goods sold and lower gross profit and margins.
Removed
Our financial results may be adversely affected if we cannot pass along energy, freight, or other input cost increases through higher prices to our customers without reducing demand or sales.
Added
The extent and duration of the tariffs and the resulting impact on general economic conditions on our business are uncertain and depend on various factors, including negotiations between the United States and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.
Removed
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 or businesses, we may not get prices or terms as favorable as we anticipated.
Added
Further, actions we take to adapt to new tariffs or trade restrictions may cause us to modify our operations or forgo business opportunities.
Removed
Any of these outcomes could negatively affect our financial results. 18 Our business faces various risks related to health epidemics and pandemics that could materially and adversely affect our business, our operations, our cash flows, and our financial results.
Added
Likewise, tariffs and import and export regulations could also limit the availability of our products, prompt consumers to seek alternative products, and provide an opportunity for competitors not subject to such tariffs to establish a presence in markets where we conduct our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese designated leaders assess various factors, including operational, financial, legal, regulatory, reputational impacts on the Company to determine the materiality of the incident and the appropriate response.. 24 We have established a tiered risk management strategy that helps us to evaluate our ability to protect assets (data and systems) by identifying, assessing, and prioritizing associated risk through, among other tools, the use of a non-affiliated third party assessor, audits by our internal audit team, tabletop exercises, penetration and vulnerability testing, and simulations.
Biggest changeWe have established a tiered risk management strategy that helps us to evaluate our ability to protect assets (data and systems) by identifying, assessing, and prioritizing associated risk through, among other tools, the use of a non-affiliated third-party assessor, audits by our internal audit team, tabletop exercises, penetration and vulnerability tests, and simulations.
In the event of an incident, we leverage a multi-layered set of plans that include, Endpoint Detection and Response software, Security Information and Event Management tools for detection, and a Cybersecurity Incident Response Plan and Disaster Recovery Response Plan for recovery.
In the event of an incident, we leverage a multi-layered set of plans that include Endpoint Detection and Response software, Security Information and Event Management tools for detection, a Cybersecurity Incident Response Plan, and a Disaster Recovery Response Plan for recovery.
The Company’s Information Technology, Enterprise Security, Internal Audit, as well as the Legal and Privacy teams work closely to identify issues and incidents in a timely manner, and report them to senior leadership, the Board of Directors, and appropriate regulatory bodies, as appropriate.
The Company’s Information Technology, Enterprise Security, Internal Audit, as well as the Legal and Privacy teams work closely to identify issues and incidents in a timely manner and report them to senior leadership, the Board of Directors, and regulatory bodies, as appropriate.
We are also continuing to advance towards an architecture based on “Zero-Trust” principles, where we continuously validate the identity and security posture of every user, device, application, or network component trying to leverage our IT resources.
We are continuing to advance towards an architecture based on “Zero-Trust” principles, where we continuously validate the identity and security posture of every user, device, application, or network component trying to leverage our IT resources.
Our CIO and CISO update the Audit Committee on a quarterly basis regarding cyber risks, the threat landscape, reports on our security roadmap, risk mitigation and governance, and any cybersecurity incidents.
Our CIO and CISO update the Audit Committee quarterly regarding cyber risks, the threat landscape, reports on our security roadmap, risk mitigation and governance, and any cybersecurity incidents.
Additionally, ERM provides support to the decision making process to enable cybersecurity risk owners to accomplish the desired level of asset protection and alignment consistent with the organization's strategy. The ERM work is presented annually to the Audit Committee and Board of Directors, including the management of top risks and the review of emerging risks. 25
Additionally, ERM provides support to the decision-making process to enable cybersecurity risk owners to accomplish the desired level of asset protection and alignment consistent with the organization’s strategy. The ERM update is presented annually to the Audit Committee and Board of Directors, including the management of top risks and the review of emerging risks. 26
Our systems periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse, or theft of personal information (of third parties, employees and their beneficiaries, and customers) and other data. These incidents have not had a material impact on our services, system, or business during the past reporting period.
Our systems periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse, or theft of personal information (of third parties, employees and their beneficiaries, and customers) and other data. These incidents have not had a material impact on our services, systems, or business.
Our Global Information Security Team is responsible for the information security strategy, policy, security engineering, operations, and cyber threat detection and response. Our Global Information Security Team, which includes a security operations center, seeks to protect the company against reasonably foreseeable cyber threats and risks. The cybersecurity team members have the qualifications and certifications for their roles.
Our Global Information Security team is responsible for the information security strategy, policy, security engineering, operations, and cyberthreat detection and response. Our Global Information Security team, which includes a security operations center, seeks to protect the company against reasonably foreseeable cyberthreats and risks. The cybersecurity team members have the qualifications and certifications required for their roles.
However, despite our capabilities, processes, and other security measures we employ, we may not be aware of all vulnerabilities or might not accurately assess the risk of an incident. Additional information on cybersecurity risks we face can be found in Item 1A. Risk Factors, which should be read in conjunction with the foregoing information.
However, despite our capabilities, processes, and other security measures we employ, we may not be aware of all vulnerabilities or might not accurately assess the risk of an incident. Additional information on cybersecurity risks we face can be found in Item 1A.
Cybersecurity Governance The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. The Board of Directors has delegated oversight of risks related to cybersecurity to the Audit Committee.
Risk Factors, which should be read in conjunction with the foregoing information. 25 Cybersecurity Governance The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. The Board of Directors has delegated oversight of risks related to cybersecurity to the Audit Committee.
They also have relevant industry experience in selecting, deploying, and operating cybersecurity technologies, initiatives, and processes globally. We also rely on threat intelligence as well as other information obtained from governmental, public, or private sources, including external consultants that we engage.
In addition, they have relevant industry experience in selecting, deploying, and operating cybersecurity technologies, initiatives, and processes globally. In order to stay ahead of potential threats and enhance our overall security posture, we rely on threat intelligence as well as other information obtained from governmental, public, or private sources, including external consultants that we engage.
In addition, our employees undergo annual security awareness training to improve their understanding of cybersecurity threats, and their ability to identify and escalate potential threats.
We temper this architecture with a business-risk-based approach that ensures we protect our digital assets while aligning our security measures with our overall organizational goals and priorities. In addition, our employees undergo annual security awareness training to improve their understanding of cybersecurity threats, and their ability to identify and escalate potential threats.
Added
These designated leaders assess various factors, including operational, financial, legal, regulatory, and reputational impacts on the Company to determine the materiality of the incident and the appropriate response.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePrincipal Properties Location Principal Activities Notes United States: Louisville, Kentucky Corporate offices Includes several renovated historic structures Distilling, bottling, warehousing Home of Old Forester Visitors' center Cooperage Brown-Forman Cooperage Lynchburg, Tennessee Distilling, bottling, warehousing Home of Jack Daniel's Visitors' center Woodford County, Kentucky Distilling, bottling, warehousing Home of Woodford Reserve Visitors' center Windsor, California Vineyards, winery, bottling, warehousing Home of Sonoma-Cutrer 1 Visitors' center Trinity, Alabama Cooperage Jack Daniel Cooperage 2 International: Cour-Cheverny, France Distilling, bottling, warehousing Home of Chambord Amatitán, Mexico Distilling, bottling, warehousing, RTD canning Home of Herradura and el Jimador Visitors' center Slane, Ireland Distilling Home of Slane Irish Whiskey Visitors' center Aberdeenshire, Scotland Distilling, warehousing Home of The Glendronach Visitors' center Morayshire, Scotland Distilling, warehousing Home of Benriach Visitors' center Newbridge, Scotland Bottling Portsoy, Scotland Distilling, warehousing Home of Glenglassaugh Visitors' center Provincia de Panamá, Panamá Warehousing, bottling Home of Diplomático 1 Sonoma-Cutrer California Wines and related assets were divested on April 30, 2024. 2 The Jack Daniel Cooperage was divested on May 1, 2024. 26
Biggest changePrincipal Properties Location Principal Activities Notes United States: Louisville, Kentucky Corporate offices Includes several renovated historic structures Distilling, bottling, warehousing Home of Old Forester Visitors’ center Cooperage Brown-Forman Cooperage 1 Lynchburg, Tennessee Distilling, bottling, warehousing Home of Jack Daniel’s Visitors’ center Woodford County, Kentucky Distilling, bottling, warehousing Home of Woodford Reserve Visitors’ center International: Cour-Cheverny, France Distilling, bottling, warehousing Home of Chambord Amatitán, Mexico Distilling, bottling, warehousing, RTD canning Home of Herradura and el Jimador Visitors’ center Slane, Ireland Distilling Home of Slane Irish Whiskey Visitors’ center Aberdeenshire, Scotland Distilling, warehousing Home of The Glendronach Visitors’ center Morayshire, Scotland Distilling, warehousing Home of Benriach Visitors’ center Newbridge, Scotland Bottling Portsoy, Scotland Distilling, warehousing Home of Glenglassaugh Visitors’ center Provincia de Panamá, Panamá Warehousing, bottling Home of Diplomático 1 The Brown-Forman Cooperage was closed in April 2025.
Item 2. Properties Our Company-owned production facilities include distilleries, a winery 1 , bottling plants, an RTD canning plant, warehousing operations, a cooperage, visitors' centers, and retail shops. We also have agreements with other parties for contract production in Australia, Belgium, China, Ireland, Latvia, Mexico, the Netherlands, New Zealand, South Africa, Spain, the United Kingdom, the United States, and Venezuela.
Item 2. Properties Our Company-owned production facilities include distilleries, bottling plants, an RTD canning plant, warehousing operations, a cooperage 1 , visitors’ centers, and retail shops. We also have agreements with other parties for contract production in Australia, Belgium, China, Ireland, Latvia, Mexico, the Netherlands, Spain, the United Kingdom, the United States, and Venezuela.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph shows the value that each of these investments would have had on April 30 in the years since 2019. 2019 2020 2021 2022 2023 2024 Brown-Forman Corporation $100 $118 $146 $132 $129 $96 S&P 500 Index $100 $101 $147 $148 $151 $186 S&P 500 Consumer Staples Index $100 $104 $127 $148 $152 $155 Item 6. [Reserved] 28
Biggest changeThe graph shows the value that each of these investments would have had on April 30 in the years since 2020. 2020 2021 2022 2023 2024 2025 Brown-Forman Corporation $100 $124 $112 $109 $82 $61 S&P 500 Index $100 $146 $146 $150 $184 $207 S&P 500 Consumer Staples Index $100 $123 $143 $146 $150 $172 Item 6. [Reserved] 28
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.
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.
The information presented assumes an initial investment of $100 on April 30, 2019, and that all dividends were reinvested.
The information presented assumes an initial investment of $100 on April 30, 2020, and that all dividends were reinvested.
As of May 31, 2024, we had 2,334 holders of record of Class A common stock and 4,382 holders of record of Class B common stock. Because of overlapping ownership between classes, as of May 31, 2024, we had only 4,732 distinct common stockholders of record.
As of May 31, 2025, we had 2,272 holders of record of Class A common stock and 4,198 holders of record of Class B common stock. Because of overlapping ownership between classes, as of May 31, 2025, we had only 4,596 distinct common stockholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

94 edited+48 added−48 removed20 unchanged
Biggest changeThe increase was largely offset by the absence of a non-cash impairment charge for the Finlandia brand name in the prior year, as well as the absence of post-closing costs and expenses in connection with the acquisitions of Diplomático and Gin Mare in the prior year. • Reported advertising expenses increased 4% in fiscal 2024, driven by increased investment in JDTW, advertising expense for the recently acquired Gin Mare and Diplomático brands, and advertising expense associated with the launch of Jack Daniel’s & Coca-Cola RTD. • Reported SG&A expenses increased 11% in fiscal 2024, led by higher compensation and benefit-related expenses and the commitment to the Foundation and Dendrifund. 43 Operating Income Percentage change versus the prior fiscal year ended April 30 2024 Change in reported operating income 25 % Acquisitions and divestitures (27 %) Impairment charges (7 %) Other items 1 2 % Foreign exchange 4 % Change in organic operating income (2 %) Note: Results may differ due to rounding 1 Other Items include “JDCC” and “Foundation”.
Biggest changeThe decrease in operating expenses was primarily driven by (a) lower SG&A and advertising expenses; (b) the favorable fair value adjustment to Gin Mare’s contingent consideration liability; (c) the positive effect of foreign exchange; (d) the impact of our recently divested brands and assets; and (e) the franchise tax refund, partially offset by the negative effect of the restructuring initiative and the non-cash impairment charge for the Gin Mare brand name. • Advertising expenses decreased 8% in fiscal 2025, driven by (a) lower JDTA and JDTW spend; (b) the impact of our recently divested brands; (c) lower Jack Daniel’s and Coca-Cola RTD spend as compared to the prior-year period launch in the United States; and (d) the positive effect of foreign exchange. • SG&A expenses decreased 10% in fiscal 2025, driven by (a) lower compensation-and-benefit-related expenses; (b) lapping the prior-year expenses related to charitable contributions to the Foundation and Dendrifund; (c) the absence of transaction-related expenses for the recent divestitures; and (d) the positive effect of foreign exchange. 42 Operating Income Percentage change versus the prior fiscal year ended April 30 2025 Change in reported operating income (22 %) Acquisitions and divestitures 16 % Impairment charges 4 % Other items 1 2 % Foreign exchange 3 % Change in organic operating income 3 % Note: Results may differ due to rounding 1 “Other items” includes “restructuring initiative,” “foundation,” “franchise tax refund,” and “JDCC.” See “Non-GAAP Financial Measures” above for additional details.
This aggregation represents our net sales of branded products to these markets. • “Brazil” includes Brazil, Uruguay, Paraguay, and certain other surrounding territories. • “Travel Retail” represents our net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military, regardless of customer location. • “Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey and wine, regardless of customer location .
This aggregation represents our net sales of branded products to these markets. • “Brazil” includes Brazil, Paraguay, Uruguay, and certain other surrounding territories. • “Travel Retail” represents our net sales of branded products to global duty-free customers, other travel retail customers, and the U.S. military, regardless of customer location. • “Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey, regardless of customer location .
(In this report, “dollar” always means the U.S. dollar unless stated otherwise.) To eliminate the effect of foreign exchange fluctuations when comparing across periods, we translate current-year results at prior-year rates and remove transactional and hedging foreign exchange gains and losses from current- and prior-year periods.
(In this report, “dollar” means the U.S. dollar unless stated otherwise.) To eliminate the effect of foreign exchange fluctuations when comparing across periods, we translate current-year results at prior-year rates and remove transactional and hedging foreign exchange gains and losses from current- and prior-year periods.
In “Results of Operations - Fiscal 2024 Market Highlights,” we provide supplemental information for our top markets ranked by percentage of reported net sales. In addition to markets listed by country name, we include the following aggregations: • “Developed International” markets are “advanced economies” as defined by the IMF, excluding the United States.
In “Results of Operations - Fiscal 2025 Market Highlights,” we provide supplemental information for our top markets ranked by percentage of reported net sales. In addition to markets listed by country name, we include the following aggregations: • “Developed International” markets are “advanced economies” as defined by the IMF, excluding the United States.
During the fourth quarter of fiscal 2024, we sold the Sonoma-Cutrer wine business in exchange for an ownership percentage of 21.4% in The Duckhorn Portfolio Inc. (Duckhorn) along with $50 million cash and entered into a related TSA for this business. This transaction resulted in a pre-tax gain of $175 million.
During fiscal 2024, we sold the Sonoma-Cutrer wine business in exchange for an ownership percentage of 21.4% in The Duckhorn Portfolio Inc. (Duckhorn) along with $50 million cash and entered into a related TSA for this business. This transaction resulted in a pre-tax gain of $175 million.
Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year. During the third quarter of fiscal 2023, we acquired Gin Mare Brand, S.L.U. and Mareliquid Vantguard, S.L.U., which owned the Gin Mare brand (Gin Mare).
Excluding non-comparable periods allows us to include the effects of acquired and divested brands only to the extent that results are comparable year over year. During fiscal 2023, we acquired Gin Mare Brand, S.L.U. and Mareliquid Vantguard, S.L.U., which owned the Gin Mare brand (Gin Mare).
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 expenses 1 ; and (h) organic operating income.
We use “organic change” for the following measures: (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 expenses 1 ; and (h) organic operating income.
A comparison of fiscal 2023 to fiscal 2022 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 ended April 30, 2023 (2023 Form 10-K).
A comparison of fiscal 2024 to fiscal 2023 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 ended April 30, 2024 (2024 Form 10-K).
Brand Aggregations. In “Results of Operations - Fiscal 2024 Brand Highlights,” we provide supplemental information for our top brands ranked by percentage of reported net sales. In addition to brands listed by name, we include the aggregations outlined below.
Brand Aggregations. In “Results of Operations - Fiscal 2025 Brand Highlights,” we provide supplemental information for our top brands ranked by percentage of reported net sales. In addition to brands listed by name, we include the aggregations outlined below.
A discussion of our cash flows for fiscal 2023 compared to fiscal 2022 may be found in “Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations,” of our 2023 Form 10-K.
A discussion of our cash flows for fiscal 2024 compared to fiscal 2023 may be found in “Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2024 Form 10-K.
We use the non-GAAP measure “organic change”, along with other metrics, to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the Board of Directors, stockholders, and investment community.
We use the non-GAAP measure “organic change,” along with other metrics, to: (a) understand our performance from period to period on a consistent basis; (b) compare our performance to that of our competitors; (c) calculate components of management incentive compensation; (d) plan and forecast; and (e) communicate our financial performance to the Board of Directors, stockholders, and the investment community.
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. 48
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. 47
The following table compares the assumed discount rates and expected return on assets used in determining net periodic benefit cost for fiscal 2024 to those to be used in determining that cost for fiscal 2025.
The following table compares the assumed discount rates and expected return on assets used in determining net periodic benefit cost for fiscal 2025 to those to be used in determining that cost for fiscal 2026.
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 to shipments when discussing volume. • “Depletions.” This is a term commonly used in the beverage alcohol industry to describe volume.
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 to shipments when discussing volume. • “Depletions.” This metric is commonly used in the beverage alcohol industry to describe volume.
See “Results of Operations - Fiscal 2024 Market Highlights” and “Results of Operations - Fiscal 2024 Brand Highlights” above for details on the factors contributing to the change in reported net sales for fiscal 2024.
See “Results of Operations - Fiscal 2025 Market Highlights” and “Results of Operations - Fiscal 2025 Brand Highlights” above for details on the factors contributing to the change in reported net sales for fiscal 2025.
We present changes in certain measures, or line items, of the statements of operations that are adjusted to an “organic” basis.
“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.
The brands included in this category are the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), the Woodford Reserve family of brands (Woodford Reserve), the Old Forester family of brands (Old Forester), The Glendronach, Glenglassaugh, Benriach, Slane Irish Whiskey, and Coopers’ Craft. • “American whiskey” includes the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below) and premium bourbons (defined below). • “Premium bourbons” includes Woodford Reserve, Old Forester, and Coopers’ Craft. • “Super-premium American whiskey” includes Woodford Reserve, Gentleman Jack, and other super-premium Jack Daniel's expressions. • “Ready-to-Drink” includes all ready-to-drink (RTD) and ready-to-pour (RTP) products.
The brands included in this category are the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), the Woodford Reserve family of brands (Woodford Reserve), the Old Forester family of brands (Old Forester), The Glendronach, Benriach, Glenglassaugh, and Slane Irish Whiskey. • “American whiskey” includes the Jack Daniel’s family of brands (excluding the “Ready-to-Drink” products defined below), Woodford Reserve, and Old Forester. • “Super-premium American whiskey” includes Woodford Reserve, Gentleman Jack, and other super-premium Jack Daniel’s expressions. • “Ready-to-Drink” includes all ready-to-drink (RTD) and ready-to-pour (RTP) products.
During the third quarter of fiscal 2024, we sold the Finlandia vodka business, which resulted in a pre-tax gain of $92 million, and entered into a related transition services agreement (TSA) for this business.
During fiscal 2024, we sold our Finlandia vodka business, which resulted in a pre-tax gain of $92 million, and entered into a related transition services agreement (TSA) for this business.
Under the Repurchase Program, we repurchased 175,632 Class A shares at an average price of $59.35 per share and 6,736,658 Class B shares at an average price of $57.83 per share, for a total cost of $400 million.
Under the Repurchase Program, we repurchased 175,632 Class A shares at an average price of $59.35 per share and 6,736,658 Class B shares at an average price of $57.83 per share, for a total cost of $400 million. The program was completed in December 2023.
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 2024 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 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 2025 Brand Highlights,” “Results of Operations - Fiscal 2025 Market 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.
“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 five quarter-end balances.
“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 five quarter-end balances. After-tax interest expense equals interest expense multiplied by one minus our effective tax rate.
Dividends In November 2023, our Board of Directors approved a 6% increase in the quarterly cash dividend on our Class A and Class B common stock from $0.2055 per share to $0.2178 per share, effective with the regular quarterly dividend paid on January 2, 2024.
Dividends In November 2024, our Board of Directors approved a 4% increase in the quarterly cash dividend on our Class A and Class B common stock from $0.2178 per share to $0.2265 per share, effective with the regular quarterly dividend paid on January 2, 2025.
The program was completed in December 2023. 46 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.
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.
We explain these adjustments below. • “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on sale of divested brands, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs 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).
We explain these adjustments below. • “Acquisitions and divestitures.” This adjustment removes (a) the gain or loss recognized on the sale of divested brands and certain assets, (b) any non-recurring effects related to our acquisitions and divestitures (e.g., transaction, transition, and integration costs), (c) the effects of operating activity related to acquired and divested brands for periods not comparable year over year (non-comparable periods), and (d) fair value changes to contingent consideration liabilities.
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 7, 10, and 12 to the Consolidated Financial Statements).
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 8, 11, and 13 to the Consolidated Financial Statements).
Cash and cash equivalents were $374 million at April 30, 2023, and $446 million at April 30, 2024. As of April 30, 2024, approximately 50% of our cash and cash equivalents were held by our foreign subsidiaries whose earnings we expect to 44 reinvest indefinitely outside of the United States.
Cash and cash equivalents were $446 million at April 30, 2024, and $444 million at April 30, 2025. As of April 30, 2025, approximately 54% of our cash and cash equivalents were held by our foreign subsidiaries whose earnings we expect to reinvest indefinitely outside of the United States.
See Note 7 to the Consolidated Financial Statements for outstanding commercial paper balances, interest rates, and days to maturity at April 30, 2023 and April 30, 2024. The average balances, interest rates, and original maturities during 2023 and 2024 are presented below.
See Note 8 to the Consolidated Financial Statements for outstanding commercial paper balances, interest rates, and days to maturity at April 30, 2024 and April 30, 2025. The average balances, interest rates, and original maturities during the last two years are presented below.
Our top developed international markets were Germany, Australia, the United Kingdom, France, Canada, and Spain. This aggregation represents our net sales of branded products to these markets. • “ Spain” includes Spain and certain other surrounding territories. • “Emerging” markets are “emerging and developing economies” as defined by the IMF. Our top emerging markets were Mexico, Poland, and Brazil.
Our top developed international markets were Germany, Australia, the United Kingdom, France, and Canada. This aggregation represents our net sales of branded products to these markets. • “Emerging” markets are “emerging and developing economies” as defined by the IMF. Our top emerging markets were Mexico, Poland, Brazil, and Türkiye.
This adjustment removes the (a) transaction costs related to the divestiture, (b) the gain on sale of the Finlandia vodka business, (c) operating activity for the 1 Operating expenses include advertising expense, SG&A expense, and other expense (income), net. 29 non-comparable period, which is activity in the third and fourth quarters of fiscal 2023, and (d) net sales, cost of sales, and operating expenses recognized pursuant to the TSA related to distribution services in certain markets.
This adjustment removes the (a) transaction costs related to the divestiture; (b) the gain on sale of the Sonoma-Cutrer wine business; (c) operating activity for the non-comparable period, 1 Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net. 29 which is all activity in fiscal 2024; and (d) net sales, cost of sales, and operating expenses recognized pursuant to the TSA related to distribution services in certain markets.
Share Repurchases In October 2023, our Board of Directors authorized the repurchase of up to $400 million (excluding brokerage fees and excise taxes) of outstanding shares of Class A and Class B common stock from October 2, 2023, through October 1, 2024 (the Repurchase Program), subject to market and other conditions.
The dividend is payable on July 1, 2025, to stockholders of record on June 9, 2025. 45 Share Repurchases In October 2023, our Board of Directors authorized the repurchase of up to $400 million (excluding brokerage fees and excise taxes) of outstanding shares of Class A and Class B common stock from October 2, 2023, through October 1, 2024 (the Repurchase Program), subject to market and other conditions.
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.” 32 • 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 2023 and fiscal 2024.
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. 1 A nnounced the end of the sales, marketing, and distribution relationship with Korbel Champagne Cellars effective June 30, 2025. 32 Significant Developments Below, we discuss the significant developments in our business during fiscal 2024 and fiscal 2025.
This increase was driven by higher reported operating income and the benefit of a lower effective tax rate, partially offset by higher invested capital. 36 Summary of Operating Performance Fiscal 2023 and Fiscal 2024 2023 vs. 2024 Fiscal year ended April 30 2023 2024 Reported Change Organic Change 1 Net sales $ 4,228 $ 4,178 (1 %) (1 %) Cost of sales $ 1,734 $ 1,652 (5 %) (7 %) Gross profit $ 2,494 $ 2,526 1 % 2 % Advertising $ 506 $ 529 4 % 2 % SG&A $ 742 $ 826 11 % 7 % Gain on business divestitures $ — $ (267) nm 4 nm 4 Other expense (income), net $ 119 $ 24 nm 4 nm 4 Operating income $ 1,127 $ 1,414 25 % (2 %) Total operating expenses 2 $ 1,367 $ 1,379 1 % 7 % As a percentage of net sales 3 Gross profit 59.0 % 60.5 % 1.5 pp Operating income 26.7 % 33.8 % 7.2 pp Interest expense, net $ 81 $ 113 40 % Effective tax rate 23.0 % 21.2 % (1.8 pp) Diluted earnings per share $ 1.63 $ 2.14 32 % Return on average invested capital 1 15.3 % 17.3 % 2.0 pp Note: Results may differ due to rounding 1 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 and why 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). 4 Percentage change is not meaningful. 37 Results of Operations Fiscal 2024 Market Highlights The following table shows net sales results for our top markets, summarized by geographic area, for fiscal 2024 compared to fiscal 2023.
This decrease was driven by lower operating income and higher invested capital, partially offset by the gain on sale of our investment in Duckhorn and a lower effective tax rate. 35 Summary of Operating Performance Fiscal 2024 and Fiscal 2025 2024 vs. 2025 Fiscal year ended April 30 2024 2025 Reported Change Organic Change 1 Net sales $ 4,178 $ 3,975 (5 %) 1 % Cost of sales $ 1,652 $ 1,632 (1 %) 5 % Gross profit $ 2,526 $ 2,343 (7 %) (2 %) Advertising $ 529 $ 484 (8 %) (6 %) SG&A $ 826 $ 744 (10 %) (5 %) Restructuring and other charges $ — $ 60 nm 4 nm 4 Gain on sale of business $ (267) $ — nm 4 nm 4 Other expense (income), net $ 24 $ (52) nm 4 nm 4 Operating income $ 1,414 $ 1,107 (22 %) 3 % Total operating expenses 2 $ 1,379 $ 1,236 (10 %) (6 %) Equity method investment income and gain on sale $ — $ (83) nm 4 nm 4 As a percentage of net sales 3 Gross profit 60.5 % 58.9 % (1.5 pp) Operating income 33.8 % 27.9 % (6.0 pp) Interest expense, net $ 113 $ 105 (7 %) Effective tax rate 21.2 % 19.6 % (1.6 pp) Diluted earnings per share $ 2.14 $ 1.84 (14 %) Return on average invested capital 1 17.3 % 14.4 % (2.9 pp) Note: Results may differ due to rounding 1 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 and why we think this information is useful to readers. 2 Operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net. 3 Year-over-year changes in percentages are reported in percentage points (pp). 4 Percentage change is not meaningful. 36 Results of Operations Fiscal 2025 Market Highlights The following table shows net sales results for our top markets, summarized by geographic area, for fiscal 2025 compared to fiscal 2024.
The assumptions also reflect our historical experience and management's best judgment regarding future expectations. We believe the discount rates and expected return on plan assets are the most significant assumptions.
We review these assumptions annually and modify them based on current rates and trends when appropriate. The assumptions also reflect our historical experience and management’s best judgment regarding future expectations. We believe the discount rates and expected return on plan assets are the most significant assumptions.
When we provide guidance for organic change in certain measures of the statements of operations we do not provide guidance for the corresponding GAAP change, as the GAAP measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreign exchange, which could have a significant impact to our GAAP income statement measures.
When we provide guidance for organic change in certain measures of the statements of operations, we do not provide guidance for the corresponding GAAP change, as the GAAP 1 This adjustment comprises $60 million of costs included in restructuring and other charges and $3 million of restructuring-related inventory charges included in cost of sales. 30 measure will include items that are difficult to quantify or predict with reasonable certainty, such as foreign exchange, which could have a significant impact to our GAAP income statement measures.
Our MD&A is organized as follows: Table of Contents Page Presentation basis 29 Significant developments 34 Executive summary 36 Results of operations 38 Liquidity and capital resources 44 Critical accounting policies and estimates 47 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).
Our MD&A is organized as follows: Table of Contents Page Presentation basis 29 Significant developments 33 Executive summary 35 Results of operations 37 Liquidity and capital resources 44 Critical accounting policies and estimates 46 Presentation Basis Non-GAAP Financial Measures We report our financial results in accordance with U.S. generally accepted accounting principles (GAAP).
We also estimate that, all else equal, a 1 percentage point increase in the discount rate would result in an impairment charge of $29 million for the Gin Mare brand name and $44 million for the Diplomático brand name. We estimate that the fair values of our other brand names substantially exceed their carrying amounts.
We also estimate that, all else equal, a 1 percentage point increase in the discount rate would result in an incremental impairment charge of $43 million for the Gin Mare brand name and a $4 million impairment charge for the Diplomático brand name.
The TSA negatively impacted our reported gross margin during fiscal 2024. During the fourth quarter of fiscal 2024, we sold the Sonoma-Cutrer wine business in exchange for an ownership percentage of 21.4% in Duckhorn along with $50 million cash and entered into a related TSA for this business. This transaction resulted in a pre-tax gain of $175 million.
The absence of the brand negatively impacted our net sales and operating income, though positively impacted gross margin for fiscal 2025. During fiscal 2024, we sold the Sonoma-Cutrer wine business in exchange for an ownership percentage of 21.4% in Duckhorn along with $50 million cash and entered into a related TSA for this business.
(Dollars in millions) 2023 2024 Average commercial paper $ 158 $ 475 Average interest rate 4.69 % 5.46 % Average days to maturity at issuance 41 32 Our commercial paper program is supported by available commitments under our undrawn $900 million bank credit facility that expires on May 26, 2028.
(Dollars in millions) 2024 2025 Average commercial paper $ 475 $ 373 Average interest rate 5.46 % 5.13 % Average days to maturity at issuance 32 41 Our commercial paper program is supported by available commitments under our undrawn $900 million bank credit facility, which was extended for an additional year and expires on May 26, 2029.
This information is provided by third parties, such as Nielsen and the National Alcohol Beverage Control Association (NABCA). Our estimates of market share or changes in market share are derived from consumer takeaway data using the retail sales value metric.
This information is provided by outside parties, such as Nielsen and the National Alcohol Beverage Control Association (NABCA). Our estimates of market share or changes in market share are derived from consumer takeaway data using the retail sales value metric. • “Estimated net change in distributor inventories.” We generally recognize revenue when our products are shipped or delivered to customers.
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 when appropriate.
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 believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our ample debt capacity enabled by our strong short-term and long-term credit ratings, will be sufficient to meet all of our future financial commitments. 45 Cash Flow Summary The following table summarizes our cash flows for each of the last two fiscal years: (Dollars in millions) 2023 2024 Cash flows from operating activities $ 640 $ 647 Investing activities: Proceeds from business divestitures $ — $ 246 Business acquisitions (1,195) — Additions to property, plant, and equipment (183) (228) Other 23 31 Net cash flows from investing activities $ (1,355) $ 49 Financing activities: Net change in short-term borrowings $ 234 $ 192 Net proceeds from long-term debt 398 — Acquisition of treasury stock (400) Dividends paid (378) (404) Other (15) (6) Net cash flows from financing activities $ 239 $ (618) Cash provided by operations of $647 million during fiscal 2024 increased $7 million from fiscal 2023, primarily reflecting a smaller increase in cash used for working capital compared to the prior fiscal year.
We believe our current liquidity position, supplemented by our ability to generate positive cash flows from operations in the future, and our ample debt capacity enabled by our strong short-term and long-term credit ratings, will be sufficient to meet all of our future financial commitments. 44 Cash Flow Summary The following table summarizes our cash flows for each of the last two fiscal years: Cash Flow Summary (Dollars in millions) 2024 2025 Cash flows from operating activities $ 647 $ 598 Investing activities: Proceeds from business divestitures $ 246 $ — Proceeds from sale of equity method investment — 350 Additions to property, plant, and equipment (228) (167) Other 31 66 Net cash flows from investing activities $ 49 $ 249 Financing activities: Net change in short-term borrowings $ 192 $ (117) Net proceeds from long-term debt — (300) Acquisition of treasury stock (400) — Dividends paid (404) (420) Other (6) (6) Net cash flows from financing activities $ (618) $ (843) Cash provided by operations of $598 million during fiscal 2025 declined $49 million from fiscal 2024.
We adjust these liabilities in light of changing circumstances, such as the progress of 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.
We believe these liabilities are appropriate for all known contingencies, but the assessment of our positions could change. Years can elapse before we can resolve a particular matter for which we may have established a tax liability.
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.
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.
This adjustment removes the transaction costs related to the divestiture and the gain on sale of the Sonoma-Cutrer wine business. During the second quarter of fiscal 2024, we recognized a gain of $7 million on the sale of certain fixed assets. This adjustment removes the gain from our other expense (income), net and operating income.
During fiscal 2024, we recognized a gain of $7 million on the sale of certain fixed assets related to a divested mill. During fiscal 2025, we recognized a gain of $12 million on the sale of the Alabama cooperage. This adjustment removes the gains from our other expense (income), net and operating income.
As a result, the indicated annual cash dividend increased from $0.8220 per share to $0.8712 per share. On May 23, 2024, our Board of Directors declared a regular quarterly cash dividend on our Class A and Class B common stock of $0.2178 per share. The dividend is payable on July 1, 2024, to stockholders of record on June 7, 2024.
As a result, the indicated annual cash dividend increased from $0.8712 per share to $0.9060 per share. On May 22, 2025, our Board of Directors declared a regular quarterly cash dividend on our Class A and Class B common stock of $0.2265 per share.
For example, we estimate that, all else equal, a 15% decline in projected net sales would result in an impairment charge of $25 million for the Gin Mare brand name and $35 million for the Diplomático brand name.
Reasonably possible changes in the significant assumptions discussed above could result in future impairment of either of those brands. For example, we estimate that, all else equal, a 15% decline in projected net sales would result in an incremental impairment charge of $38 million for the Gin Mare brand name and no impairment charge for the Diplomático brand name.
Cost of Sales 2024 Percentage change versus the prior fiscal year ended April 30 Volume Cost/mix Total Change in reported cost of sales (9 %) 4 % (5 %) Acquisitions and divestitures — % (1 %) (1 %) JDCC 1 1 % — % — % Foreign exchange — % (2 %) (2 %) Change in organic cost of sales (8 %) 1 % (7 %) Note: Results may differ due to rounding 1 “JDCC” is included in the Other Items Non-GAAP Financial Measure.
Cost of Sales 2025 Percentage change versus the prior fiscal year ended April 30 Volume Cost/mix Total Change in reported cost of sales (7 %) 6 % (1 %) Acquisitions and divestitures 4 % — % 4 % Other items 1 4 % (2 %) 1 % Foreign exchange — % — % — % Change in organic cost of sales 2 % 3 % 5 % Note: Results may differ due to rounding 1 “Other items” includes “JDCC” and “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details.
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 .
Additionally, we use some financial measures in this report that are not measures of financial performance under 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 define or calculate these non-GAAP measures differently.
Top Markets Net Sales % Change vs. 2023 Geographic area 1 % of Fiscal 2024 Net Sales Reported Acquisitions and Divestitures JDCC 2 Foreign Exchange Organic 3 United States 45 % (4 %) — % — % — % (4 %) Developed International 28 % (2 %) (2 %) — % — % (5 %) Germany 6 % 10 % (1 %) — % (2 %) 7 % Australia 5 % (8 %) — % — % 2 % (6 %) United Kingdom 4 % (11 %) (1 %) — % (2 %) (14 %) France 3 % — % (2 %) — % (1 %) (3 %) Canada 1 % 2 % (1 %) — % 1 % 2 % Spain 1 % 2 % (1 %) — % (2 %) (1 %) Rest of Developed International 7 % (4 %) (6 %) — % — % (9 %) Emerging 21 % 5 % 1 % — % 2 % 8 % Mexico 7 % 19 % — % — % (13 %) 6 % Poland 3 % 15 % 3 % — % (6 %) 11 % Brazil 2 % 5 % — % — % (2 %) 3 % Rest of Emerging 9 % (6 %) 2 % — % 14 % 10 % Travel Retail 4 % 8 % (1 %) — % — % 6 % Non-branded and bulk 2 % (2 %) — % — % — % (2 %) Total 100 % (1 %) (1 %) — % — % (1 %) Note: Results may differ due to rounding 1 See “Definitions” above for definitions of market aggregations presented here. 2 "JDCC” is included in the Other Items Non-GAAP Financial Measure.
Top Markets Net Sales % Change vs. 2024 Geographic area 1 % of Fiscal 2025 Net Sales Reported Acquisitions and Divestitures Other Items 2 Foreign Exchange Organic 3 United States 44 % (7 %) 3 % 1 % — % (2 %) Developed International 27 % (6 %) 2 % — % 1 % (3 %) Germany 6 % (4 %) — % — % — % (3 %) Australia 5 % (2 %) 1 % — % 3 % 1 % United Kingdom 4 % (6 %) — % — % (1 %) (6 %) France 3 % — % — % — % — % — % Canada 1 % (14 %) 4 % — % 2 % (8 %) Rest of Developed International 8 % (9 %) 5 % — % 2 % (3 %) Emerging 21 % (2 %) 5 % — % 6 % 9 % Mexico 7 % (8 %) — % — % 12 % 4 % Poland 3 % (11 %) 21 % — % (5 %) 4 % Brazil 3 % 12 % — % — % 7 % 19 % Türkiye 2 % 30 % 1 % — % 12 % 43 % Rest of Emerging 8 % (2 %) 6 % — % 1 % 5 % Travel Retail 4 % (7 %) 2 % — % — % (5 %) Non-branded and bulk 3 % 18 % 1 % — % — % 18 % Total 100 % (5 %) 3 % 1 % 2 % 1 % Note: Results may differ due to rounding 1 See “Definitions” above for definitions of market aggregations presented here. 2 “Other items” includes “JDCC.” See “Non-GAAP Financial Measures” above for additional details. 3 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 this information is useful to readers.
Top Brands Net Sales % Change vs. 2023 Product category / brand family / brand 1 Reported Acquisitions & Divestitures JDCC 2 Foreign Exchange Organic 3 Whiskey (3 %) — % — % 1 % (2 %) JDTW (6 %) — % — % 2 % (5 %) JDTH (8 %) — % — % — % (8 %) Gentleman Jack (10 %) — % — % 2 % (9 %) JDTA 32 % — % — % 1 % 33 % JDTF (11 %) — % — % — % (11 %) Woodford Reserve 2 % — % — % — % 3 % Old Forester 11 % — % — % — % 11 % Rest of Whiskey 15 % — % — % 1 % 16 % Ready-to-Drink 2 % — % 1 % (4 %) — % JD RTD/RTP (6 %) — % 1 % — % (5 %) New Mix 32 % — % — % (15 %) 17 % Tequila (4 %) — % — % (3 %) (7 %) el Jimador — % — % — % (1 %) (1 %) Herradura (10 %) — % — % (3 %) (13 %) Wine — % — % — % — % — % Vodka (Finlandia) (16 %) 19 % — % 1 % 3 % Rest of Portfolio 61 % (49 %) — % 3 % 15 % Non-branded and bulk (2 %) — % — % — % (2 %) Note: Results may differ due to rounding 1 See “Definitions” above for definitions of brand aggregations presented here. 2 "JDCC” is included in the Other Items Non-GAAP Financial Measure.
Top Brands Net Sales % Change vs. 2024 Product category / brand family / brand 1 Reported Acquisitions & Divestitures Other Items 2 Foreign Exchange Organic 3 Whiskey — % — % — % 1 % 1 % JDTW — % — % — % 1 % 1 % JDTH — % — % — % 2 % 2 % Gentleman Jack 4 % — % — % 1 % 5 % JDTA — % — % — % 3 % 3 % JDTF (3 %) — % — % 1 % (2 %) Woodford Reserve 8 % — % — % — % 8 % Old Forester 8 % — % — % — % 8 % Rest of Whiskey (23 %) — % — % 1 % (22 %) Ready-to-Drink (6 %) — % 5 % 6 % 5 % JD RTD/RTP (8 %) — % 7 % 3 % 1 % New Mix (1 %) — % — % 13 % 13 % Tequila (14 %) — % — % 2 % (12 %) el Jimador (13 %) — % — % 1 % (11 %) Herradura (13 %) — % — % 3 % (10 %) Rest of Portfolio (33 %) 31 % — % 1 % (2 %) Non-branded and bulk 18 % 1 % — % — % 18 % Note: Results may differ due to rounding 1 See “Definitions” above for definitions of brand aggregations presented here. 2 “Other items” includes “JDCC.” See “Non-GAAP Financial Measures” above for additional details. 3 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 this information is useful to readers.
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.
We estimate that the fair values of our other brand names substantially exceed their carrying amounts. 46 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.
Pension Benefits Medical and Life Insurance Benefits 2024 2025 2024 2025 Discount rate for service cost 4.98 % 5.75 % 5.02 % 5.77 % Discount rate for interest cost 4.79 % 5.59 % 4.78 % 5.58 % Expected return on plan assets 6.50 % 6.50 % n/a n/a Using these assumptions, we estimate our pension and other postretirement benefit cost for fiscal 2025 will be approximately $18 million, compared to $21 million for fiscal 2024.
Pension Benefits Medical and Life Insurance Benefits 2025 2026 2025 2026 Discount rate for service cost 5.74 % 5.78 % 5.73 % 5.84 % Discount rate for interest cost 5.53 % 5.10 % 5.49 % 4.97 % Expected return on plan assets 6.56 % 6.75 % n/a n/a Using these assumptions, we estimate our pension and other postretirement benefit cost for fiscal 2026 will be approximately $15 million (excluding any potential settlement or curtailment charges), compared to $18 million (excluding curtailment charges of $3 million) for fiscal 2025.
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.
In the United States and certain other markets, our customers are distributors that sell downstream to retailers and consumers. We believe that our distributors’ downstream sales more closely reflect actual consumer demand than do our shipments to distributors. Our shipments increase distributors’ inventories, while distributors’ depletions (as described above) reduce their inventories.
The increase in gross margin was primarily driven by favorable price/mix and lower supply chain disruption related costs, partially offset by higher input costs and the negative effect of foreign exchange.
The decrease in gross margin was driven by higher costs and the negative effect of foreign exchange, partially offset by favorable price/mix, the impact of JDCC, and the positive effect of acquisitions and divestitures.
Decreasing/increasing the assumed return on plan assets by 50 basis points would increase/decrease the total fiscal 2025 cost by approximately $3 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.
Decreasing/increasing the assumed discount rates by 50 basis points would increase/decrease the total fiscal 2026 cost by approximately $3 million. Decreasing/increasing the assumed return on plan assets by 50 basis points would also increase/decrease the total fiscal 2026 cost by approximately $3 million. Income Taxes Significant judgment is required in evaluating our tax positions.
During fiscal 2024, this production fully transitioned to Pabst Brewing Company for the Jack Daniel’s Country Cocktails products.
During fiscal 2024, this production fully transitioned to Pabst Brewing Company for the Jack Daniel’s Country Cocktails products. This adjustment removes the non-comparable operating activity related to the sales of Brown-Forman-produced Jack Daniel’s Country Cocktails products for fiscal 2024 and 2025.
Net Sales 2024 Percentage change versus the prior fiscal year ended April 30 Volume Price/mix Total Change in reported net sales (9 %) 8 % (1 %) Acquisitions and divestitures — % (1 %) (1 %) JDCC 1 1 % (1 %) — % Foreign exchange — % — % — % Change in organic net sales (8 %) 6 % (1 %) Note: Results may differ due to rounding 1 “JDCC” is included in the Other Items Non-GAAP Financial Measure.
Net Sales 2025 Percentage change versus the prior fiscal year ended April 30 Volume Price/mix Total Change in reported net sales (7 %) 2 % (5 %) Acquisitions and divestitures 4 % (1 %) 3 % Other items 1 4 % (3 %) 1 % Foreign exchange — % 2 % 2 % Change in organic net sales 2 % (1 %) 1 % Note: Results may differ due to rounding 1 “Other items” includes “JDCC.” See “Non-GAAP Financial Measures” above for additional details.
Reported gross profit of $2.5 billion increased $32 million, or 1%, in fiscal 2024 compared to fiscal 2023. Gross margin increased to 60.5% in fiscal 2024, up 1.5 percentage points from 59.0% in fiscal 2023.
Gross profit of $2.3 billion decreased $183 million, or 7%, in fiscal 2025 compared to fiscal 2024. Gross margin decreased to 58.9% in fiscal 2025, down 1.5 percentage points from 60.5% in fiscal 2024.
Gross margin increased to 60.5% in fiscal 2024, up 1.5 percentage points from 59.0% in fiscal 2023.
Gross margin decreased to 58.9% in fiscal 2025, down 1.5 percentage points from 60.5% in fiscal 2024.
During fiscal 2023 and fiscal 2024, we returned a total of $1.2 billion to our stockholders through $782 million in regular dividends and $400 million in share repurchases. 35 Executive Summary Fiscal 2024 Highlights • We delivered reported net sales of $4.2 billion, a decrease of 1% compared to fiscal 2023.
During fiscal 2024 and fiscal 2025, we returned a total of $1.2 billion to our stockholders through $824 million in regular dividends and $400 million in share repurchases. 34 Executive Summary Unless otherwise indicated, all related commentary is on a reported basis.
We have the option, before quantifying the fair value of a brand name, to evaluate qualitative factors to assess whether it is more likely than not that the brand name is 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.
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 brand name, to evaluate qualitative factors to assess whether it is more likely than not that the brand name is impaired.
“ Foundation .” During the fourth quarter of fiscal 2024, we committed $23 million to the Brown-Forman Foundation and Dendrifund (the Foundation and Dendrifund) to support the communities where our employees live and work. This adjustment removes the commitment to the Foundation from our organic SG&A expenses and organic operating income to present our organic results on a comparable basis.
“ Foundation . ” During fiscal 2024, we committed $23 million to the Brown-Forman Foundation and Dendrifund (the Foundation and Dendrifund) to support the communities where our employees live and work.
In fiscal 2024, these brands positively contributed to our reported net sales growth and reported operating income. During the third quarter of fiscal 2024, we sold the Finlandia vodka business for $196 million cash and entered into a related TSA for this business. This transaction resulted in a pre-tax gain of $92 million.
These developments relate to divestitures, Gin Mare impairment and earn-out valuation, the restructuring initiative, innovation, and capital deployment. Divestitures During fiscal 2024, we sold the Finlandia vodka business for $196 million cash and entered into a related TSA for this business. This transaction resulted in a pre-tax gain of $92 million.
Gross Margin Fiscal year ended April 30 2024 Prior year gross margin 59.0 % Price/mix 2.8 % Cost (excluding tariffs) (0.5 %) Foreign exchange (0.8 %) Other 1 0.1 % Change in gross margin 1.5 % Current year gross margin 60.5 % Note: Results may differ due to rounding 1 “Other” comprises the impact of acquisitions and divestitures, tariffs, and JDCC, which is included in the Other Items Non-GAAP Financial Measure (see Presentation Basis above for additional details).
Gross Profit Percentage change versus the prior fiscal year ended April 30 2025 Change in reported gross profit (7 %) Acquisitions and divestitures 3 % Other items 1 — % Foreign exchange 3 % Change in organic gross profit (2 %) Note: Results may differ due to rounding 1 “Other items” includes “JDCC” and “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details. 41 Gross Margin Fiscal year ended April 30 2025 Prior year gross margin 60.5 % Price/mix 1.1 % Cost (2.5 %) Acquisitions and divestitures 0.3 % Other items 1 0.3 % Foreign exchange (0.7 %) Change in gross margin (1.5 %) Current year gross margin 58.9 % Note: Results may differ due to rounding 1 “Other items” includes “JDCC” and “restructuring initiative.” See “Non-GAAP Financial Measures” above for additional details.
Fiscal 2025 Outlook Below we discuss our outlook for fiscal 2025, which reflects the trends, developments, and uncertainties (including those described above) that we expect to affect our business. We anticipate a return to growth for organic net sales and organic operating income in fiscal 2025 driven by gains in international markets and the benefit of normalizing inventory trends.
Fiscal 2026 Outlook Below we discuss our outlook for fiscal 2026, which reflects the trends, developments, and uncertainties (including those described above) that we expect to affect our business.
We discuss results of the markets most affecting our performance below the table.
We discuss results of the markets most affecting our performance below the table. Unless otherwise indicated, all related commentary is on a reported basis.
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 a meaningful indicator of how effectively and efficiently we invest capital in our business. 30 In fiscal 2023, we changed the methodology used to determine average invested capital.
We use this non-GAAP measure because we consider it to be a meaningful indicator of how effectively and efficiently we invest capital in our business. Definitions Aggregations .
Operating Expenses Percentage change versus the prior fiscal year ended April 30 2024 Reported Acquisitions & Divestitures Impairment Foundation 1 Foreign Exchange Organic Advertising 4 % (2 %) — % — % (1 %) 2 % SG&A 11 % — % — % (3 %) (1 %) 7 % Total operating expenses 2 1 % 2 % 8 % (2 %) (1 %) 7 % Note: Results may differ due to rounding 1 “Foundation” is included in the Other Items Non-GAAP Financial Measure.
Operating Expenses Percentage change versus the prior fiscal year ended April 30 2025 Reported Acquisitions & Divestitures Impairment Other Items 1 Foreign Exchange Organic Advertising (8 %) 2 % — % — % 1 % (6 %) SG&A (10 %) 1 % — % 3 % 1 % (5 %) Total operating expenses 2 (10 %) 6 % (3 %) (2 %) 3 % (6 %) Note: Results may differ due to rounding 1 “Other items” includes “restructuring initiative,” “foundation,” and “franchise tax refund.” See “Non-GAAP Financial Measures” above for additional details. 2 Total operating expenses include advertising expense, SG&A expense, restructuring and other charges, and other expense (income), net.
Innovation within the Jack Daniel’s family of brands has contributed to our growth in the last two fiscal years as described below. ◦ In fiscal 2023, we announced our global relationship with The Coca-Cola Company to introduce the Jack Daniel's & Coca-Cola RTD to select markets around the world.
Innovation within the Jack Daniel’s family of brands has contributed to our growth in the last two fiscal years as described below. ◦ In fiscal 2024, we continued the international launch of Jack Daniel’s Tennessee Apple, expanding to certain developed international and emerging markets.
We assess our brand names for impairment at least annually, or more frequently if circumstances indicate the carrying amount may be impaired. A brand name is impaired when its carrying amount exceeds its estimated fair value, in which case we write down the brand name to its estimated fair value.
We assess our brand names for impairment at least annually, or more frequently if circumstances indicate the carrying amount may be impaired. Our annual impairment assessment is performed as of the first day of our fourth fiscal quarter.
The brands included in this category are Jack Daniel’s RTD and RTP products (JD RTD/RTP), New Mix, and other RTD/RTP products. 31 • “Jack Daniel’s RTD/RTP” products include all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Cola, Jack Daniel’s & Coca-Cola RTD, 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. • “Jack Daniel’s & Coca-Cola RTD” includes all Jack Daniel’s and Coca-Cola RTD products and Jack Daniel’s bulk whiskey shipments for the production of this product. • “Tequila” includes el Jimador, the Herradura family of brands (Herradura), and other tequilas. • “Wine” includes Korbel California Champagnes and Sonoma-Cutrer wines (which was divested on April 30, 2024).
The brands included in this category are Jack Daniel’s RTD and RTP products (JD RTD/RTP), New Mix, and other RTD/RTP products. • “Jack Daniel’s RTD/RTP” products include all RTD line extensions of Jack Daniel’s, such as Jack Daniel’s & Coca-Cola RTD, Jack Daniel’s & Cola, Jack Daniel’s Double Jack, Jack Daniel’s Country Cocktails, and other malt- and spirit-based Jack Daniel’s RTDs, along with Jack Daniel’s Winter Jack RTP. 31 • “Jack Daniel’s & Coca-Cola RTD” includes all Jack Daniel’s & Coca-Cola RTD products and Jack Daniel’s bulk whiskey shipments for the production of these products. • “Tequila” includes el Jimador, the Herradura family of brands (Herradura), and other tequilas. • “Rest of Portfolio” includes Korbel California Champagnes 1 , Diplomático, Chambord, Gin Mare, Sonoma-Cutrer (which was divested on April 30, 2024), Finlandia Vodka (which was divested on November 1, 2023), Korbel Brandy 1 , Fords Gin, and other agency brands (brands we do not own, but sell in certain markets). • “Non-branded and bulk” includes net sales of used barrels, contract bottling services, and non-branded bulk whiskey. • “Jack Daniel’s family of brands” includes Jack Daniel’s Tennessee Whiskey (JDTW), JD RTD/RTP, Jack Daniel’s Tennessee Honey (JDTH), Gentleman Jack, Jack Daniel’s Tennessee Apple (JDTA), Jack Daniel’s Tennessee Fire (JDTF), Jack Daniel’s Single Barrel Collection (JDSB), Jack Daniel’s Sinatra Select, Jack Daniel’s Bonded Tennessee Whiskey, Jack Daniel’s Bonded Rye Tennessee Whiskey, Jack Daniel’s Triple Mash Blended Straight Whiskey, Jack Daniel’s American Single Malt, Jack Daniel’s 12 Year Old, Jack Daniel’s 14 Year Old, Jack Daniel’s 10 Year Old, and other Jack Daniel’s expressions.
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 our stockholders through regular dividends and, from time to time, through share repurchases and special dividends.
Considering these factors, we expect the following in fiscal 2026: • Organic net sales decline in the low-single digit range. • Organic operating income decline in the low-single digit range. • Our effective tax rate to be in the range of approximately 21% to 23%. • Capital expenditures planned to be in the range of $125 to $135 million. 43 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 our stockholders through regular dividends and, from time to time, through share repurchases and special dividends.
See Note 12 to the Consolidated Financial Statements for details. Diluted earnings per share were $2.14 in fiscal 2024, an increase of 32% compared to fiscal 2023, driven primarily by the increase in reported operating income.
See Note 13 to the Consolidated Financial Statements for details. Diluted earnings per share were $1.84 in fiscal 2025, a decrease of 14% compared to fiscal 2024, driven primarily by the decrease in operating income, partially offset by the gain on sale of our investment in Duckhorn and the benefit of the lower effective tax rate.
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.
A brand name is impaired when its carrying amount exceeds its estimated fair value, in which 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.
During fiscal 2023 and fiscal 2024, our capital expenditures totaled $411 million and focused on enabling the growth of our premium whiskey, tequila, and rum brands: ◦ During fiscal 2021, our Board of Directors approved a $125 million capital investment to expand our bourbon-making capacity in Kentucky. We completed this project in fiscal 2024.
During fiscal 2024 and fiscal 2025, our capital expenditures totaled $395 million and focused on enabling the growth of our whiskey, tequila, and rum brands. This included completing a $125 million expansion of our bourbon making capacity in Kentucky and constructing additional barrel warehouses for Jack Daniel’s, Woodford Reserve, Glenglassaugh, Diplomatico, and our tequilas. • Cash returned to stockholders .
The decrease in our effective tax rate was driven primarily by the decreased impact of foreign operations and state taxes and the beneficial impact of tax rate differences on the sale of the Finlandia vodka business, which was partially offset by the absence of the net benefit from the reversal of the valuation allowances and the impact of the prior fiscal year tax true-ups in fiscal 2024.
The decrease in our effective tax rate was driven primarily by (a) increased benefit of the foreign-derived intangible income deduction; (b) the beneficial impact of state income tax refunds related to amended tax returns; and (c) prior-year tax return true ups, which was partially offset by the increased impact of valuation allowances in the current period.
This adjustment removes (a) the transaction, transition, and integration costs related to the acquisition, and (b) operating activity for the non-comparable periods, which is primarily activity in the first three quarters of fiscal 2024.
This adjustment removes the (a) transaction costs related to the divestiture; (b) the gain on sale of the Finlandia vodka business; (c) operating activity for the non-comparable period, which is activity in the first and second quarters of fiscal 2024; and (d) net sales, cost of sales, and operating expenses recognized pursuant to the TSA related to distribution services in certain markets.
This adjustment removes the non-comparable operating activity related to the sales of Brown-Forman-produced Jack Daniel’s Country Cocktails products during the fourth quarter of fiscal 2023 and fiscal 2024. • “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.
See Notes 6 and 21 to the Consolidated Financial Statements for more information. • “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.
We believe that these adjustments allow for us to better understand our organic results on a comparable basis. See Notes 13 and 14 to the Consolidated Financial Statements for more information. • “Impairment Charges.” This adjustment removes the impact of impairment charges from our results of operations.
See Notes 5, 15, and 17 to the Consolidated Financial Statements for more information. • “Impairment Charges.” This adjustment removes the impact of impairment charges from our results of operations. During fiscal 2024, we recognized a non-cash impairment charge of $7 million for an immaterial discontinued brand name.
This adjustment removes (a) the transaction, transition, and integration costs related to the acquisition, (b) operating activity for the non-comparable periods, which is activity in the first and second quarters of fiscal 2024, and (c) fair value adjustments to Gin Mare’s earn-out contingent consideration liability that is payable in cash no earlier than July 2024 and no later than July 2027.
This adjustment removes the fair value adjustments to Gin Mare’s contingent consideration liability that is payable in cash no later than July 2027. We recognized $43 million in favorable fair value adjustments to Gin Mare’s contingent consideration liability during fiscal 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThis 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 some of these exposures through forward purchase contracts.
Biggest changeThis 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 natural gas, wood, corn, malted barley, aluminum, agave, and rye. We manage some of these exposures through forward purchase contracts.
See Notes 15 and 16 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 other postretirement plans' exposure to interest rate risks. Also see “Item 1A.
See Note 16 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 other postretirement plans’ exposure to interest rate risks. Also see “Item 1A.
Risk Factors” for details on how economic conditions affecting market risks also affect the demand for and pricing of our products and how we are affected by exchange rate fluctuations. 49
Risk Factors” for details on how economic conditions affecting market risks also affect the demand for and pricing of our products and how we are affected by exchange rate fluctuations. 48
We had outstanding currency derivatives with notional amounts totaling $747 million and $566 million at April 30, 2023 and 2024, respectively. We estimate that a hypothetical 10% weakening of the dollar compared to exchange rates of hedged currencies as of April 30, 2024, would decrease the fair value of our then-existing foreign currency derivative contracts by approximately $45 million.
We had outstanding currency derivatives with notional amounts totaling $566 million and $463 million at April 30, 2024 and 2025, respectively. We estimate that a hypothetical 10% weakening of the dollar compared to exchange rates of hedged currencies as of April 30, 2025, would decrease the fair value of our then-existing foreign currency derivative contracts by approximately $39 million.
As of April 30, 2024, our cash and cash equivalents ($446 million) and short-term commercial paper borrowings ($429 million) were exposed to interest rate changes. Based on the then-existing balances of our variable-rate debt and interest-bearing investments, a hypothetical one percentage point increase in interest rates would result in a negligible change in net interest expense.
As of April 30, 2025, our cash and cash equivalents ($444 million) and short-term commercial paper borrowings ($313 million, at par) were exposed to interest rate changes. Based on the then-existing balances of our variable-rate debt and interest-bearing investments, a hypothetical one percentage point increase in interest rates would result in a negligible change in net interest expense.