Brown-Forman(BF_A) - 2024 Q4 - Annual Report

Financial Performance - Reported net sales for fiscal 2024 were $4.2 billion, a decrease of 1$50 million compared to fiscal 2023, primarily due to lower volumes offset by favorable price/mix and acquisitions[76]. - Reported cost of sales decreased by $82 million, or 5$1.7 billion in fiscal 2024, driven by lower volumes and partially offset by cost/mix factors[77]. - Gross profit increased by 1% year-over-year, with a current gross margin of 60.5%, up from 59.0% in the prior year[86]. - Operating income rose to $1.4 billion, an increase of 25$2.14 in fiscal 2024, driven primarily by the increase in reported operating income[92]. Future Projections - The company anticipates organic net sales growth in the range of 2% to 4% for fiscal 2025, along with organic operating income growth in the same range[94]. Cash Flow and Dividends - Cash and cash equivalents increased from $374 million in April 2023 to$446 million in April 2024[95]. - Cash flows from operating activities were $647 million in fiscal 2024, a slight increase from$640 million in fiscal 2023[100]. - The Board of Directors approved a 6% increase in the quarterly cash dividend, raising it from $0.2055 to$0.2178 per share, effective January 2, 2024[102]. - Cash used for financing activities was $618 million in fiscal 2024, a significant change from$239 million in cash provided during fiscal 2023, largely due to increased share repurchases[101]. - The Board of Directors authorized a share repurchase program of up to $400 million from October 2, 2023, through October 1, 2024[104]. Pension and Retirement Benefits - The estimated pension and other postretirement benefit cost for fiscal 2025 is approximately$18 million, down from $21 million for fiscal 2024[114]. - The discount rate for service cost is projected to increase from 4.98$4 million[114]. Brand Valuation and Risks - A 15% decline in projected net sales could result in an impairment charge of $25 million for the Gin Mare brand name and$35 million for the Diplomático brand name[109]. - The company believes none of its brand names are impaired as of April 30, 2024, with fair values substantially exceeding carrying amounts[110]. Currency and Commodity Risks - As of April 30, 2024, the company had outstanding currency derivatives with notional amounts totaling $566 million[124]. - A hypothetical 10$45 million[125]. - The company manages commodity price risks through forward purchase contracts for significant commodities like wood, corn, and agave[119]. - As of April 30, 2024, cash and cash equivalents were $446 million, with short-term commercial paper borrowings of$429 million exposed to interest rate changes[127].