Document and Entity Information

6 Months Ended

Oct. 31, 2014

Nov. 30, 2014

Common stock, Class A, voting [Member]

Nov. 30, 2014

Common stock, Class B, nonvoting [Member]

Document Information [Line Items]

Entity Registrant Name

BROWN FORMAN CORP

Entity Central Index Key

0000014693

Document Type

10-Q

Document Period End Date

Oct. 31, 2014

Amendment Flag

false

Document Fiscal Year Focus

2015

Document Fiscal Period Focus

Q2

Current Fiscal Year End Date

--04-30

Entity Filer Category

Large Accelerated Filer

Entity Common Stock, Shares Outstanding

84,505,212

126,920,334

Condensed Consolidated Statements of Operations (Unaudited) (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Oct. 31, 2014

Oct. 31, 2013

Oct. 31, 2014

Oct. 31, 2013

Income Statement [Abstract]

Net sales

$ 1,135

$ 1,079

$ 2,056

$ 1,975

Excise taxes

258

246

474

455

Cost of sales

268

257

478

467

Gross profit

609

576

1,104

1,053

Advertising expenses

123

111

223

214

Selling, general, and administrative expenses

178

162

348

318

Other expense (income), net

5

(8)

10

(7)

Operating income

303

311

523

528

Interest income

0

1

Interest expense

7

14

13

Income before income taxes

296

305

510

516

Income taxes

88

99

152

167

Net income

$ 208

$ 206

$ 358

$ 349

Earnings per share:

Basic (dollars per share)

$ 0.98

$ 0.97

$ 1.68

$ 1.63

Diluted (dollars per share)

$ 0.97

$ 0.96

$ 1.67

$ 1.62

Cash dividends per common share:

Declared (dollars per share)

$ 0.000

$ 0.580

$ 0.510

Paid (dollars per share)

$ 0.290

$ 0.255

$ 0.580

$ 0.510

Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Oct. 31, 2014

Oct. 31, 2013

Oct. 31, 2014

Oct. 31, 2013

Statement of Comprehensive Income [Abstract]

Net income

$ 208

$ 206

$ 358

$ 349

Other comprehensive income (loss), net of tax:

Currency translation adjustments

(30)

7

(46)

(5)

Cash flow hedge adjustments

22

(10)

27

(4)

Postretirement benefits adjustments

12

14

16

19

Net other comprehensive income (loss)

4

11

(3)

10

Comprehensive income

$ 212

$ 217

$ 355

$ 359

Condensed Consolidated Balance Sheets (Unaudited) (USD $)

In Millions, unless otherwise specified

Oct. 31, 2014

Apr. 30, 2014

Assets

Cash and cash equivalents

$ 235

$ 437

Accounts receivable, less allowance for doubtful accounts of $9 and $8 at April 30 and October 31, respectively

761

569

Inventories:

Barreled whiskey

530

504

Finished goods

232

187

Work in process

150

144

Raw materials and supplies

59

47

Total inventories

971

882

Current deferred tax assets

25

33

Other current assets

307

256

Total current assets

2,299

2,177

Property, plant, and equipment, net

556

526

Goodwill

614

620

Other intangible assets

651

677

Deferred tax assets

17

18

Other assets

106

85

Total assets

4,243

4,103

Liabilities

Accounts payable and accrued expenses

535

474

Accrued income taxes

12

71

Current deferred tax liabilities

7

8

Short-term borrowings

124

8

Total current liabilities

678

561

Long-term debt

998

997

Deferred tax liabilities

113

102

Accrued pension and other postretirement benefits

226

244

Other liabilities

153

167

Total liabilities

2,168

2,071

Commitments and contingencies

Stockholders' Equity

Additional paid-in capital

99

81

Retained earnings

3,114

2,894

Accumulated other comprehensive income (loss), net of tax

(191)

(188)

Treasury stock, at cost (13,858,000 and 15,899,000 shares at April 30 and October 31, respectively)

(981)

(789)

Total stockholders' equity

2,075

2,032

Total liabilities and stockholders' equity

4,243

4,103

Common stock, Class A, voting [Member]

Stockholders' Equity

Common stock

13

Common stock, Class B, nonvoting [Member]

Stockholders' Equity

Common stock

$ 21

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $)

In Millions, except Share data, unless otherwise specified

Oct. 31, 2014

Apr. 30, 2014

Allowance for doubtful accounts

$ 8

$ 9

Treasury stock, shares

15,899,000

13,858,000

Common stock, Class A, voting [Member]

Common stock, shares authorized

85,000,000

Common stock, shares issued

85,000,000

Common stock, Class B, nonvoting [Member]

Common stock, shares authorized

400,000,000

Common stock, shares issued

142,313,000

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)

In Millions, unless otherwise specified

6 Months Ended

Oct. 31, 2014

Oct. 31, 2013

Cash flows from operating activities:

Net income

$ 358

$ 349

Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization

25

24

Stock-based compensation expense

6

Deferred income taxes

(18)

(6)

Changes in assets and liabilities

(301)

(172)

Cash provided by operating activities

70

201

Cash flows from investing activities:

Additions to property, plant, and equipment

(59)

(60)

Acquisition of brand names and trademarks

(3)

0

Computer software expenditures

(1)

0

Cash used for investing activities

(63)

(60)

Cash flows from financing activities:

Net increase in short-term borrowings

117

3

Repayment of long-term debt

0

(1)

Net payments related to exercise of stock-based awards

(6)

Excess tax benefits from stock-based awards

17

9

Acquisition of treasury stock

(205)

(49)

Dividends paid

(124)

(109)

Cash used for financing activities

(201)

(153)

Effect of exchange rate changes on cash and cash equivalents

(8)

0

Net increase (decrease) in cash and cash equivalents

(202)

(12)

Cash and cash equivalents, beginning of period

437

204

Cash and cash equivalents, end of period

$ 235

$ 192

Condensed Consolidated Financial Statements

We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. In accordance with those rules and regulations, we condensed or omitted certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). We suggest that you read these condensed financial statements together with the financial statements and footnotes included in our annual report on Form 10-K for the fiscal year ended April 30, 2014 (the 2014 Form 10-K). We prepared the accompanying financial statements on a basis that is substantially consistent with the accounting principles applied in our 2014 Form 10-K.

In our opinion, the accompanying financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of our financial results for the periods covered by this report.

In May 2014, the Financial Accounting Standards Board issued new guidance on the recognition of revenue from contracts with customers. We are currently evaluating the potential impact on our financial statements of the new guidance, which will become effective for us beginning in fiscal 2018.

Inventories

We use the last-in, first-out (LIFO) method to determine the cost of most of our inventories. If the LIFO method had not been used, inventories at current cost would have been $216 million higher than reported as of April 30, 2014, and $222 million higher than reported as of October 31, 2014. Changes in the LIFO valuation reserve for interim periods are based on a proportionate allocation of the estimated change for the entire fiscal year.

Income Taxes

Our consolidated interim effective tax rate is based upon our expected annual operating income, statutory tax rates, and income tax laws in the various jurisdictions in which we operate. Significant or unusual items, including adjustments to accruals for tax uncertainties, are recognized in the quarter in which the related event occurs. The effective tax rate of 29.9% for the six months ended October 31, 2014, is based on an expected tax rate of 29.7% on ordinary income for the full fiscal year, as adjusted for the recognition of net tax expense related to discrete items arising during the period and interest on previously provided tax contingencies. Our expected tax rate includes current fiscal year additions for existing tax contingency items.

Earnings Per Share

We calculate basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share further includes the dilutive effect of stock-based compensation awards, including stock options, stock-settled stock appreciation rights, restricted stock units, deferred stock units, and shares of restricted stock. We calculate that dilutive effect using the “treasury stock method” (as defined by GAAP).

The following table presents information concerning basic and diluted earnings per share:



	Three Months Ended				Six Months Ended
	October 31,				October 31,
(Dollars in millions, except per share amounts)	2013		2014		2013		2014
Net income available to common stockholders	$	206	$	208	$	349	$	358
Share data (in thousands):
Basic average common shares outstanding	213,587		212,087		213,634		212,674
Dilutive effect of stock-based awards	1,617		1,482		1,614		1,528
Diluted average common shares outstanding	215,204		213,569		215,248		214,202

Basic earnings per share	$	0.97	$	0.98	$	1.63	$	1.68
Diluted earnings per share	$	0.96	$	0.97	$	1.62	$	1.67

We excluded common stock-based awards for approximately 410,000 shares and 363,000 shares from the calculation of diluted earnings per share for the three months ended October 31, 2013 and 2014, respectively. We excluded common stock-based awards for approximately 412,000 shares and 365,000 shares from the calculation of diluted earnings per share for the six months ended October 31, 2013 and 2014, respectively. We excluded those awards because they were not dilutive for those periods under the treasury stock method.

Contingencies

Commitments and Contingencies

We operate in a litigious environment, and we are sued in the normal course of business. Sometimes plaintiffs seek substantial damages. Significant judgment is required in predicting the outcome of these suits and claims, many of which take years to adjudicate. We accrue estimated costs for a contingency when we believe that a loss is probable and we can make a reasonable estimate of the loss, and then adjust the accrual as appropriate to reflect changes in facts and circumstances. We do not believe it is reasonably possible that these loss contingencies, individually or in the aggregate, would have a material adverse effect on our financial position, results of operations, or liquidity. No material accrued loss contingencies are recorded as of October 31, 2014.

We have guaranteed the repayment by a third-party importer of its obligation under a bank credit facility that it uses in connection with its importation of our products in Russia. If the importer were to default on that obligation, which we believe is unlikely, our maximum possible exposure under the existing terms of the guaranty would be approximately $45 million (subject to changes in foreign currency exchange rates). Both the fair value and carrying amount of the guaranty are insignificant.

As of October 31, 2014, our actual exposure under the guaranty of the importer's obligation is approximately $11 million. We also have accounts receivable from that importer of approximately $31 million at that date, which we expect to collect in full and according to agreed-upon terms.

Based on the financial support we provide to it, we believe the importer meets the definition of a variable interest entity. However, because we do not control this entity, it is not included in our consolidated financial statements.

Pension and Other Postretirement Benefits

The following table shows the components of the pension and other postretirement benefit cost recognized for our U.S. benefit plans during the periods covered by this report. Information about similar international plans is not presented due to immateriality.



	Three Months Ended						Six Months Ended
	October 31,						October 31,
(Dollars in millions)	2013			2014			2013			2014
Pension Benefits:
Service cost	$	5		$	5		$	11		$	11
Interest cost	8			8			15			17
Expected return on plan assets	(10		)	(10		)	(20		)	(21		)
Amortization of:
Prior service cost	—			—			—			1
Net actuarial loss	8			6			16			11
Net cost	$	11		$	9		$	22		$	19

Other Postretirement Benefits:
Service cost	$	—		$	—		$	1		$	1
Interest cost	1			1			2			2
Amortization of prior service cost	—			—			—			(1		)
Net cost	$	1		$	1		$	3		$	2

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We categorize the fair values of assets and liabilities into three levels based upon the assumptions (inputs) used to determine those values. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are:


•	Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.


•	Level 2 – Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be derived from or corroborated by observable market data.


•	Level 3 – Unobservable inputs that are supported by little or no market activity.

The following table summarizes the assets and liabilities measured or disclosed at fair value on a recurring basis:



(Dollars in millions)	Level 1		Level 2		Level 3		Total
April 30, 2014:
Assets:
Currency derivatives	$	—	$	7	$	—	$	7
Liabilities:
Currency derivatives	—		7		—		7
Short-term borrowings	—		8		—		8
Long-term debt	—		963		—		963
October 31, 2014:
Assets:
Currency derivatives	—		51		—		51
Liabilities:
Short-term borrowings	—		124		—		124
Long-term debt	—		975		—		975

We determine the fair values of our currency derivatives (forwards and options) using standard valuation models. The significant inputs used in these models are readily available in public markets or can be derived from observable market transactions. Inputs used in these standard valuation models include the applicable exchange rate, forward rates and discount rates for the currency derivatives. The standard valuation model for foreign currency options also uses implied volatility as an additional input. The discount rates are based on the historical U.S. Treasury rates, and the implied volatility specific to individual foreign currency options is based on quoted rates from financial institutions.

The fair value of short-term borrowings approximates the carrying amount. We determine the fair value of long-term debt primarily based on the prices at which similar debt has recently traded in the market and also considering the overall market conditions on the date of valuation.

We measure some assets and liabilities at fair value on a nonrecurring basis. That is, we do not measure them at fair value on an ongoing basis, but we do adjust them to fair value in some circumstances (for example, when we determine that an asset is impaired). No material nonrecurring fair value measurements were required during the periods presented in these financial statements.

Fair Value of Financial Instruments

The fair value of cash, cash equivalents, and short-term borrowings approximate the carrying amounts due to the short maturities of these instruments. We determine the fair value of derivative financial instruments and long-term debt as discussed in Note 7.

Below is a comparison of the fair values and carrying amounts of these instruments:



	April 30, 2014				October 31, 2014
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets:
Cash and cash equivalents	$	437	$	437	$	235	$	235
Currency derivatives	7		7		51		51
Liabilities:
Currency derivatives	7		7		—		—
Short-term borrowings	8		8		124		124
Long-term debt	997		963		998		975

Derivative Financial Instruments

Our multinational business exposes us to global market risks, including the effect of fluctuations in currency exchange rates, commodity prices, and interest rates. We use derivatives to help manage financial exposures that occur in the normal course of business. We formally document the purpose of each derivative contract, which includes linking the contract to the financial exposure it is designed to mitigate. We do not hold or issue derivatives for trading or speculative purposes.

We use currency derivative contracts to limit our exposure to the currency exchange risk that we cannot mitigate internally by using netting strategies. We designate most of these contracts as cash flow hedges of forecasted transactions (expected to occur within three years). We record all changes in the fair value of cash flow hedges (except any ineffective portion) in accumulated other comprehensive income (AOCI) until the underlying hedged transaction occurs, at which time we reclassify that amount into earnings. We assess the effectiveness of these hedges based on changes in forward exchange rates. The ineffective portion of the changes in fair value of our hedges (recognized immediately in earnings) during the periods presented in this report was not material.

We do not designate some of our currency derivatives as hedges because we use them to at least partially offset the immediate earnings impact of changes in foreign exchange rates on existing assets or liabilities. We immediately recognize the change in fair value of these contracts in earnings.

We had outstanding currency derivatives, related primarily to our euro, British pound, Russian ruble, and Australian dollar exposures, with total notional amounts totaling $1,152 million at April 30, 2014 and $1,063 million at October 31, 2014.

We use forward purchase contracts with suppliers to protect against corn price volatility. We expect to physically take delivery of the corn underlying each contract and use it for production over a reasonable period of time. Accordingly, we account for these contracts as normal purchases rather than derivative instruments.

From time to time, we manage our interest rate risk with swap contracts. However, no such swaps were outstanding at

April 30, 2014 or October 31, 2014.

The following tables present the amounts affecting our consolidated statements of operations for the periods covered by this report:



		Three Months Ended
		October 31,
(Dollars in millions)	Classification	2013			2014
Currency derivatives designated as cash flow hedge:
Net gain (loss) recognized in AOCI	n/a	$	(15	)	$	42
Net gain (loss) reclassified from AOCI into income	Net sales	—			6
Derivatives not designated as hedging instruments:
Currency derivatives – net gain (loss) recognized in income	Net sales	(5		)	11
Currency derivatives – net gain (loss) recognized in income	Other income	—			3

		Six Months Ended
		October 31,
(Dollars in millions)	Classification	2013			2014
Currency derivatives designated as cash flow hedge:
Net gain (loss) recognized in AOCI	n/a	$	(5	)	$	47
Net gain (loss) reclassified from AOCI into income	Net sales	1			4
Derivatives not designated as hedging instruments:
Currency derivatives – net gain (loss) recognized in income	Net sales	(1		)	8
Currency derivatives – net gain (loss) recognized in income	Other income	2			(6		)

We expect to reclassify $25 million of deferred net gains recorded in AOCI as of October 31, 2014, to earnings during the next 12 months. This reclassification would offset the anticipated earnings impact of the underlying hedged exposures. The actual amounts that we ultimately reclassify to earnings will depend on the exchange rates in effect when the underlying hedged transactions occur. The maximum term of our outstanding derivative contracts was 27 months at April 30, 2014 and 27 months at October 31, 2014.

The following table presents the fair values of our derivative instruments as of April 30, 2014 and October 31, 2014.



(Dollars in millions)	Classification	Fair value of derivatives in a gain position		Fair value of derivatives in a loss position
April 30, 2014:
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	6	$	(6	)
Currency derivatives	Other assets	2		—
Currency derivatives	Accrued expenses	2		(6		)
Currency derivatives	Other liabilities	—		(4		)
Not designated as hedges:
Currency derivatives	Other current assets	5		—
Currency derivatives	Accrued expenses	1		—
October 31, 2014:
Designated as cash flow hedges:
Currency derivatives	Other current assets	33		(2		)
Currency derivatives	Other assets	16		(1		)
Not designated as hedges:
Currency derivatives	Other current assets	6		(1		)

The fair values reflected in the above table are presented on a gross basis. However, as discussed further below, the fair values of those instruments that are subject to net settlement agreements are presented on a net basis in the accompanying consolidated balance sheets.

Credit risk. We are exposed to credit-related losses if the counterparties to our derivative contracts default. This credit risk is limited to the fair value of the contracts. To manage this risk, we contract only with major financial institutions that have earned investment-grade credit ratings and with whom we have standard International Swaps and Derivatives Association (ISDA) agreements that allow for net settlement of the derivative contracts. Also, we have established counterparty credit guidelines that are regularly monitored and that provide for reports to senior management according to prescribed guidelines, and we monetize contracts when we believe it is warranted. Because of these safeguards, we believe the risk of loss from counterparty default to be immaterial.

Some of our derivative instruments require us to maintain a specific level of creditworthiness, which we have maintained. If our creditworthiness were to fall below that level, then the counterparties to our derivative instruments could request immediate payment or collateralization for derivative instruments in net liability positions. The aggregate fair value of all derivatives with creditworthiness requirements that were in a net liability position was $6 million at April 30, 2014 and $0 at October 31, 2014.

Offsetting. As noted above, our derivative contracts are governed by ISDA agreements that allow for net settlement of derivative contracts with the same counterparty. It is our policy to present the fair values of current derivatives (i.e., those with a remaining term of 12 months or less) with the same counterparty on a net basis in the balance sheet. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. Current derivatives are not netted with noncurrent derivatives in the balance sheet. The following table summarizes the gross and net amounts of our derivative contracts.



(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts Offset in Balance Sheet			Net Amounts Presented in Balance Sheet			Gross Amounts Not Offset in Balance Sheet			Net Amounts
April 30, 2014:
Derivative assets	$	17		$	(10	)	$	7		$	(2	)	$	5
Derivative liabilities	(17		)	10			(7		)	2			(5		)
October 31, 2014:
Derivative assets	55			(4		)	51			—			51
Derivative liabilities	(4		)	4			—			—			—

No cash collateral was received or pledged related to our derivative contracts as of April 30, 2014 and October 31, 2014.

Short-Term Borrowings (Notes)

Short-term Debt [Text Block]

Short-Term Borrowings

As of October 31, 2014, our short-term borrowings include $119 million of commercial paper, with an average maturity of 6 days and a weighted-average interest rate of 0.15%. No commercial paper was outstanding at April 30, 2014.

Accumulated Other Comprehensive Income

The following table summarizes the changes in each component of accumulated other comprehensive income (AOCI), net of tax, during the three months ended October 31, 2013 and 2014:



	Currency Translation Adjustments			Cash Flow Hedge Adjustments			Postretirement Benefits Adjustments			Total AOCI

Balance at July 31, 2013	$	(2	)	$	6		$	(216	)	$	(212	)
Net other comprehensive income (loss)	7			(10		)	14			11
Balance at October 31, 2013	$	5		$	(4	)	$	(202	)	$	(201	)


Balance at July 31, 2014	$	(10	)	$	1		$	(186	)	$	(195	)
Net other comprehensive income (loss)	(30		)	22			12			4
Balance at October 31, 2014	$	(40	)	$	23		$	(174	)	$	(191	)

The following table presents the components of net other comprehensive income (loss) during the three months ended October 31, 2013 and 2014:



	Pre-Tax			Tax			Net
Three Months Ended October 31, 2013
Currency translation adjustments	$	9		$	(2	)	$	7
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(15		)	5			(10		)
Reclassification to earnings¹	—			—			—
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	14			(5		)	9
Reclassification to earnings²	8			(3		)	5
Net other comprehensive income (loss)	$	16		$	(5	)	$	11

Three Months Ended October 31, 2014
Currency translation adjustments	$	(32	)	$	2		$	(30	)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	42			(16		)	26
Reclassification to earnings¹	(6		)	2			(4		)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	14			(5		)	9
Reclassification to earnings²	6			(3		)	3
Net other comprehensive income (loss)	$	24		$	(20	)	$	4

¹Pre-tax amount is classified as net sales in the accompanying consolidated statements of operations.

²Pre-tax amount is a component of pension and other postretirement benefit expense (as shown in Note 6).

The following table summarizes the changes in each component of AOCI, net of tax, during the six months ended October 31, 2013 and 2014:



	Currency Translation Adjustments			Cash Flow Hedge Adjustments			Postretirement Benefits Adjustments			Total AOCI

Balance at April 30, 2013	$	10		$	—		$	(221	)	$	(211	)
Net other comprehensive income (loss)	(5		)	(4		)	19			10
Balance at October 31, 2013	$	5		$	(4	)	$	(202	)	$	(201	)


Balance at April 30, 2014	$	6		$	(4	)	$	(190	)	$	(188	)
Net other comprehensive income (loss)	(46		)	27			16			(3		)
Balance at October 31, 2014	$	(40	)	$	23		$	(174	)	$	(191	)

The following table presents the components of net other comprehensive income (loss) during the six months ended October 31, 2013 and 2014:



	Pre-Tax			Tax			Net
Six Months Ended October 31, 2013
Currency translation adjustments	$	(3	)	$	(2	)	$	(5	)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(5		)	2			(3		)
Reclassification to earnings¹	(1		)	—			(1		)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	14			(5		)	9
Reclassification to earnings²	16			(6		)	10
Net other comprehensive income (loss)	$	21		$	(11	)	$	10

Six Months Ended October 31, 2014
Currency translation adjustments	$	(48	)	$	2		$	(46	)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	47			(17		)	30
Reclassification to earnings¹	(4		)	1			(3		)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	14			(5		)	9
Reclassification to earnings²	12			(5		)	7
Net other comprehensive income (loss)	$	21		$	(24	)	$	(3	)

¹Pre-tax amount is classified as net sales in the accompanying consolidated statements of operations.

²Pre-tax amount is a component of pension and other postretirement benefit expense (as shown in Note 6).

Subsequent Event (Notes)

Subsequent Event

As announced on November 20, 2014, our Board of Directors increased our quarterly cash dividend on our Class A and Class B common stock from $0.29 per share to $0.315 per share. Stockholders of record on December 4, 2014, will receive the cash dividend on December 30, 2014.

Derivative Financial Instruments (Policies)

Derivatives, Offsetting Fair Value Amounts, Policy [Policy Text Block]

Offsetting. As noted above, our derivative contracts are governed by ISDA agreements that allow for net settlement of derivative contracts with the same counterparty. It is our policy to present the fair values of current derivatives (i.e., those with a remaining term of 12 months or less) with the same counterparty on a net basis in the balance sheet. Similarly, we present the fair values of noncurrent derivatives with the same counterparty on a net basis. Current derivatives are not netted with noncurrent derivatives in the balance sheet

Earnings Per Share (Tables)

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table presents information concerning basic and diluted earnings per share:



	Three Months Ended				Six Months Ended
	October 31,				October 31,
(Dollars in millions, except per share amounts)	2013		2014		2013		2014
Net income available to common stockholders	$	206	$	208	$	349	$	358
Share data (in thousands):
Basic average common shares outstanding	213,587		212,087		213,634		212,674
Dilutive effect of stock-based awards	1,617		1,482		1,614		1,528
Diluted average common shares outstanding	215,204		213,569		215,248		214,202

Basic earnings per share	$	0.97	$	0.98	$	1.63	$	1.68
Diluted earnings per share	$	0.96	$	0.97	$	1.62	$	1.67

Pension and Other Postretirement Benefits (Tables)

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

The following table shows the components of the pension and other postretirement benefit cost recognized for our U.S. benefit plans during the periods covered by this report. Information about similar international plans is not presented due to immateriality.



	Three Months Ended						Six Months Ended
	October 31,						October 31,
(Dollars in millions)	2013			2014			2013			2014
Pension Benefits:
Service cost	$	5		$	5		$	11		$	11
Interest cost	8			8			15			17
Expected return on plan assets	(10		)	(10		)	(20		)	(21		)
Amortization of:
Prior service cost	—			—			—			1
Net actuarial loss	8			6			16			11
Net cost	$	11		$	9		$	22		$	19

Other Postretirement Benefits:
Service cost	$	—		$	—		$	1		$	1
Interest cost	1			1			2			2
Amortization of prior service cost	—			—			—			(1		)
Net cost	$	1		$	1		$	3		$	2

Fair Value Measurements (Tables)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table summarizes the assets and liabilities measured or disclosed at fair value on a recurring basis:



(Dollars in millions)	Level 1		Level 2		Level 3		Total
April 30, 2014:
Assets:
Currency derivatives	$	—	$	7	$	—	$	7
Liabilities:
Currency derivatives	—		7		—		7
Short-term borrowings	—		8		—		8
Long-term debt	—		963		—		963
October 31, 2014:
Assets:
Currency derivatives	—		51		—		51
Liabilities:
Short-term borrowings	—		124		—		124
Long-term debt	—		975		—		975

Fair Value of Financial Instruments (Tables)

Comparison of the fair values and carrying amounts of financial instrument

The fair value of cash, cash equivalents, and short-term borrowings approximate the carrying amounts due to the short maturities of these instruments. We determine the fair value of derivative financial instruments and long-term debt as discussed in Note 7.

Below is a comparison of the fair values and carrying amounts of these instruments:



	April 30, 2014				October 31, 2014
	Carrying		Fair		Carrying		Fair
(Dollars in millions)	Amount		Value		Amount		Value
Assets:
Cash and cash equivalents	$	437	$	437	$	235	$	235
Currency derivatives	7		7		51		51
Liabilities:
Currency derivatives	7		7		—		—
Short-term borrowings	8		8		124		124
Long-term debt	997		963		998		975

Derivative Financial Instruments (Tables)

Derivative Instruments, Gain (Loss) [Table Text Block]

The following tables present the amounts affecting our consolidated statements of operations for the periods covered by this report:



		Three Months Ended
		October 31,
(Dollars in millions)	Classification	2013			2014
Currency derivatives designated as cash flow hedge:
Net gain (loss) recognized in AOCI	n/a	$	(15	)	$	42
Net gain (loss) reclassified from AOCI into income	Net sales	—			6
Derivatives not designated as hedging instruments:
Currency derivatives – net gain (loss) recognized in income	Net sales	(5		)	11
Currency derivatives – net gain (loss) recognized in income	Other income	—			3

		Six Months Ended
		October 31,
(Dollars in millions)	Classification	2013			2014
Currency derivatives designated as cash flow hedge:
Net gain (loss) recognized in AOCI	n/a	$	(5	)	$	47
Net gain (loss) reclassified from AOCI into income	Net sales	1			4
Derivatives not designated as hedging instruments:
Currency derivatives – net gain (loss) recognized in income	Net sales	(1		)	8
Currency derivatives – net gain (loss) recognized in income	Other income	2			(6		)

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following table presents the fair values of our derivative instruments as of April 30, 2014 and October 31, 2014.



(Dollars in millions)	Classification	Fair value of derivatives in a gain position		Fair value of derivatives in a loss position
April 30, 2014:
Designated as cash flow hedges:
Currency derivatives	Other current assets	$	6	$	(6	)
Currency derivatives	Other assets	2		—
Currency derivatives	Accrued expenses	2		(6		)
Currency derivatives	Other liabilities	—		(4		)
Not designated as hedges:
Currency derivatives	Other current assets	5		—
Currency derivatives	Accrued expenses	1		—
October 31, 2014:
Designated as cash flow hedges:
Currency derivatives	Other current assets	33		(2		)
Currency derivatives	Other assets	16		(1		)
Not designated as hedges:
Currency derivatives	Other current assets	6		(1		)

Offsetting Derivative Assets and Liabilities [Table Text Block]

The following table summarizes the gross and net amounts of our derivative contracts.



(Dollars in millions)	Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts Offset in Balance Sheet			Net Amounts Presented in Balance Sheet			Gross Amounts Not Offset in Balance Sheet			Net Amounts
April 30, 2014:
Derivative assets	$	17		$	(10	)	$	7		$	(2	)	$	5
Derivative liabilities	(17		)	10			(7		)	2			(5		)
October 31, 2014:
Derivative assets	55			(4		)	51			—			51
Derivative liabilities	(4		)	4			—			—			—

Accumulated Other Comprehensive Income (Tables)

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table summarizes the changes in each component of accumulated other comprehensive income (AOCI), net of tax, during the three months ended October 31, 2013 and 2014:



	Currency Translation Adjustments			Cash Flow Hedge Adjustments			Postretirement Benefits Adjustments			Total AOCI

Balance at July 31, 2013	$	(2	)	$	6		$	(216	)	$	(212	)
Net other comprehensive income (loss)	7			(10		)	14			11
Balance at October 31, 2013	$	5		$	(4	)	$	(202	)	$	(201	)


Balance at July 31, 2014	$	(10	)	$	1		$	(186	)	$	(195	)
Net other comprehensive income (loss)	(30		)	22			12			4
Balance at October 31, 2014	$	(40	)	$	23		$	(174	)	$	(191	)

The following table summarizes the changes in each component of AOCI, net of tax, during the six months ended October 31, 2013 and 2014:



	Currency Translation Adjustments			Cash Flow Hedge Adjustments			Postretirement Benefits Adjustments			Total AOCI

Balance at April 30, 2013	$	10		$	—		$	(221	)	$	(211	)
Net other comprehensive income (loss)	(5		)	(4		)	19			10
Balance at October 31, 2013	$	5		$	(4	)	$	(202	)	$	(201	)


Balance at April 30, 2014	$	6		$	(4	)	$	(190	)	$	(188	)
Net other comprehensive income (loss)	(46		)	27			16			(3		)
Balance at October 31, 2014	$	(40	)	$	23		$	(174	)	$	(191	)

Comprehensive Income (Loss) [Table Text Block]

The following table presents the components of net other comprehensive income (loss) during the three months ended October 31, 2013 and 2014:



	Pre-Tax			Tax			Net
Three Months Ended October 31, 2013
Currency translation adjustments	$	9		$	(2	)	$	7
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(15		)	5			(10		)
Reclassification to earnings¹	—			—			—
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	14			(5		)	9
Reclassification to earnings²	8			(3		)	5
Net other comprehensive income (loss)	$	16		$	(5	)	$	11

Three Months Ended October 31, 2014
Currency translation adjustments	$	(32	)	$	2		$	(30	)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	42			(16		)	26
Reclassification to earnings¹	(6		)	2			(4		)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	14			(5		)	9
Reclassification to earnings²	6			(3		)	3
Net other comprehensive income (loss)	$	24		$	(20	)	$	4

¹Pre-tax amount is classified as net sales in the accompanying consolidated statements of operations.

²Pre-tax amount is a component of pension and other postretirement benefit expense (as shown in Note 6).

The following table presents the components of net other comprehensive income (loss) during the six months ended October 31, 2013 and 2014:



	Pre-Tax			Tax			Net
Six Months Ended October 31, 2013
Currency translation adjustments	$	(3	)	$	(2	)	$	(5	)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	(5		)	2			(3		)
Reclassification to earnings¹	(1		)	—			(1		)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	14			(5		)	9
Reclassification to earnings²	16			(6		)	10
Net other comprehensive income (loss)	$	21		$	(11	)	$	10

Six Months Ended October 31, 2014
Currency translation adjustments	$	(48	)	$	2		$	(46	)
Cash flow hedge adjustments:
Net gain (loss) on hedging instruments	47			(17		)	30
Reclassification to earnings¹	(4		)	1			(3		)
Postretirement benefits adjustments:
Net actuarial gain (loss) and prior service cost	14			(5		)	9
Reclassification to earnings²	12			(5		)	7
Net other comprehensive income (loss)	$	21		$	(24	)	$	(3	)

¹Pre-tax amount is classified as net sales in the accompanying consolidated statements of operations.

²Pre-tax amount is a component of pension and other postretirement benefit expense (as shown in Note 6).

Inventories (Details) (USD $)

In Millions, unless otherwise specified

Oct. 31, 2014

Apr. 30, 2014

Inventories (Textual) [Abstract]

Excess of current costs over stated LIFO value

$ 222

$ 216

Income Taxes (Details)

6 Months Ended

Oct. 31, 2014

Income Taxes (Textual) [Abstract]

Effective tax rate

29.90%

Expected tax rate

29.70%

Earnings Per Share (Details) (USD $)

In Millions, except Share data in Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Oct. 31, 2014

Oct. 31, 2013

Oct. 31, 2014

Oct. 31, 2013

Basic and diluted earnings per share

Net income available to common stockholders

$ 208

$ 206

$ 358

$ 349

Share data (in thousands):

Basic average common shares outstanding

212,087

213,587

212,674

213,634

Dilutive effect of stock-based awards

1,482

1,617

1,528

1,614

Diluted average common shares outstanding

213,569

215,204

214,202

215,248

Basic earnings per share (dollars per share)

$ 0.98

$ 0.97

$ 1.68

$ 1.63

Diluted earnings per share (dollars per share)

$ 0.97

$ 0.96

$ 1.67

$ 1.62

Earnings Per Share (Details Textual)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Oct. 31, 2014

Oct. 31, 2013

Oct. 31, 2014

Oct. 31, 2013

Earnings Per Share (Textual) [Abstract]

Common stock-based awards excluded from the calculation of diluted earnings per share

363

410

365

412

Guarantee (Details) (USD $)

In Millions, unless otherwise specified

Oct. 31, 2014

Apr. 30, 2014

Concentration Risk [Line Items]

Accounts receivable

$ 761

$ 569

Credit Concentration Risk [Member]

Concentration Risk [Line Items]

Guaranty exposure, maximum

45

Guaranty exposure, current

11

Accounts receivable

$ 31

Pension and Other Postretirement Benefits (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Oct. 31, 2014

Oct. 31, 2013

Oct. 31, 2014

Oct. 31, 2013

Pension Benefits [Member]

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Service cost

$ 5

$ 11

Interest cost

8

17

15

Expected return on plan assets

(10)

(21)

(20)

Amortization of:

Prior service cost

0

1

0

Net actuarial loss

6

8

11

16

Net cost

9

11

19

22