Brown-Forman(BF_B) - 2024 Q2 - Quarterly Report

Financial Performance - For the six months ended October 31, 2023, reported net sales in the United States decreased by 4%, with an organic change of -5%[206]. - Reported net sales for the six months ended October 31, 2023, were $2.1 billion, a 2$1.3 billion, an increase of $87 million or 7$666 million, reflecting a 1% increase year-over-year[228]. - Diluted earnings per share decreased by 1% to $0.98, primarily due to higher interest expenses[228]. - Reported net sales in Japan declined by 79$723 million, reflecting a post-closing working capital adjustment of $4 million[185]. - The company agreed to sell its Finlandia vodka business to Coca-Cola HBC AG for$220 million, with an estimated adjusted sales price of $194 million as of October 31, 2023[188]. - The Sonoma-Cutrer wine business is set to be sold to The Duckhorn Portfolio, Inc. for$50 million in cash and a 21.5% ownership stake[190]. Market Performance - Emerging markets saw a 17% increase in reported net sales, with Mexico growing by 30% and Poland by 26%[206]. - Vodka (Finlandia) reported a 4% increase in net sales, driven by growth in Ukraine and Poland[212]. Expenses and Costs - Reported cost of sales for the three months ended October 31, 2023, was $436 million, a decrease of$45 million or 9% compared to the same period last year[259]. - SG&A expenses increased by 10% for the six months ended October 31, 2023, primarily due to higher compensation and benefit-related expenses[262]. - Total operating expenses increased by 11% year-over-year, with organic growth contributing 8%[261]. Taxation - The effective tax rate for the three months ended October 31, 2023, was 22.0%, down from 23.7% in the prior year[243]. - The effective tax rate for the six months ended October 31, 2023, was 22.4%, down from 23.7% in the same period last year, mainly due to decreased state tax impacts[263]. Asset and Liability Overview - The total assets as of October 31, 2023, were reported at $779 million, with total liabilities of$56 million[186]. - Cash used for investing activities was $61 million during the six months ended October 31, 2023, reflecting an increase in capital expenditures[248]. Operational Adjustments - The company uses "organic change" to adjust financial measures for acquisitions and divestitures, providing a clearer view of operational performance[216]. - The company has effective disclosure controls and procedures in place to ensure timely and accurate reporting of required information[168].