BROWN FORMAN CORPBF-A

BROWN FORMAN CORP Leases Disclosure

10-KFiled Jun 13, 20252 min read
Leases
We enter into lease arrangements, which we use primarily for office space, vehicles, and land. Substantially all of our leases are operating leases. Our finance leases are not material.
We record lease liabilities and right-of-use (ROU) assets on our balance sheet for leases with terms exceeding 12 months. We do not record lease liabilities or ROU assets for short-term leases. The amounts recorded for lease liabilities and ROU assets are based on the estimated present value, as of the lease commencement date, of the future payments to be made over the lease term. We calculate the present value using our incremental borrowing rate that corresponds to the term of the lease. We include the effect of an option to renew or terminate a lease in the lease term when it is reasonably certain that we will exercise the option.
Some of our leases contain non-lease components (e.g., maintenance or other services) in addition to lease components. We have elected the practical expedient not to separate the non-lease components from the lease components.
The following table shows information about our leases as of the end of the last two years:
Balance Sheet ClassificationApril 30,
2024		April 30,
2025
Right-of-use assetsOther assets$96 $101 
Lease liabilities:
CurrentAccounts payable and accrued expenses$24 $26 
Non-currentOther liabilities73 78 
Total$97 $104 
Weighted-average discount rate4.2%4.5%
Weighted-average remaining term5.1 years4.8 years
The following table shows information about the effects of leases during each of the last three years:
202320242025
Total lease cost1
$38 $51 $45 
Cash paid for amounts included in the measurement of lease liabilities2
25 29 30 
Right-of-use assets obtained in exchange for new lease liabilities29 38 33 
1Consists primarily of operating lease cost. Other components of lease cost were not material.
2Classified within operating activities in the accompanying consolidated statements of cash flows.

The following table includes a maturity analysis of future (undiscounted) lease payments and a reconciliation of those payments to the lease liabilities recorded on our balance sheet as of April 30, 2025:
April 30,
2025
2026
$30 
2027
27 
2028
20 
2029
16 
2030
12 
Thereafter10 
Total lease payments115 
Less: Present value discount(11)
Lease liabilities$104 

Historical Timeline

Fiscal YearFiled
2025Jun 13, 2025Showing above
2024Jun 14, 2024
2023Jun 16, 2023
2022Jun 17, 2022
2021Jun 21, 2021
2020Jun 19, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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