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Income Taxes (Tables)

12 Months Ended

Apr. 30, 2020

Domestic and Foreign income before Income taxes

The following table, based on the locations of the taxable entities from which sales were derived (rather than the location of customers), presents the U.S. and foreign components of our income before income taxes:



	2018		2019		2020
United States	$	747	$	863	$	849
Foreign	230		179		160
	$	977	$	1,042	$	1,009

Total income tax expense

Our total income tax expense for each of the last three years was as follows:



	2018			2019			2020
Current:
U.S. federal	$	265		$	107		$	95
Foreign	47			34			29
State and local	17			28			19
	329			169			143
Deferred:
U.S. federal	(48		)	37			34
Foreign	(13		)	4			7
State and local	(8		)	(3		)	(2		)
	(69		)	38			39
	$	260		$	207		$	182

Reconciles our effective tax rate to the federal statutory tax rate in the United States

The following table reconciles our effective tax rate to the federal statutory tax rate in the United States:



	Percent of Income Before Taxes
	2018		2019		2020
U.S. federal statutory rate	30.4	%	21.0	%	21.0	%
State taxes, net of U.S. federal tax benefit	0.8	%	2.1	%	1.7	%
Income taxed at other than U.S. federal statutory rate	(3.4	%)	(0.1	%)	—	%
Tax benefit from foreign-derived sales	—	%	(1.7	%)	(2.0	%)
Adjustments related to prior years	(0.9	%)	(1.2	%)	(1.1	%)
Tax benefit from U.S. manufacturing	(2.5	%)	—	%	—	%
Amortization of deferred tax benefit from intercompany transactions	(1.6	%)	—	%	—	%
Excess tax benefits from stock-based awards	(1.8	%)	(0.7	%)	(2.0	%)
Impact of Tax Act	2.5	%	(0.4	%)	—	%
Other, net	3.1	%	0.8	%	0.4	%
Effective rate	26.6	%	19.8	%	18.0	%

Deferred tax assets and liabilities

Deferred tax assets and liabilities as of the end of each of the last two years were as follows:



April 30,	2019			2020
Deferred tax assets:
Postretirement and other benefits	$	87		$	110
Accrued liabilities and other	23			23
Inventories	34			26
Lease liabilities	—			14
Loss and credit carryforwards	55			57
Valuation allowance	(25		)	(22		)
Total deferred tax assets, net	174			208
Deferred tax liabilities:
Intangible assets	(218		)	(233		)
Property, plant, and equipment	(73		)	(90		)
Right-of-use assets	—			(13		)
Derivative instruments	(9		)	(18		)
Other	(3		)	(16		)
Total deferred tax liabilities	(303		)	(370		)
Net deferred tax liability	$	(129	)	$	(162	)

Loss carryforwards and valuation allowances

Details of the loss and credit carryforwards and related valuation allowances as of the end of each of the last two years are as follows:



	April 30, 2019							April 30, 2020
	Gross Amount		Deferred Tax Asset		Valuation Allowance			Gross Amount		Deferred Tax Asset		Valuation Allowance			Expiration (as of April 30, 2020)
Finland net operating losses	$	105	$	21	$	—		$119		$24		$	—		2024-2030
Brazil net operating losses	42		14		(14		)	31		10		(10		)	None
United Kingdom non-trading losses	27		5		(5		)	26		5		(5		)	None
Various state net operating losses and credits	68		6		—			63		9		—			Various¹
Other	54		9		(6		)	50		9		(7		)	Various²
	$	296	$	55	$	(25	)	$	289	$	57	$	(22	)

¹As of April 30, 2020, the net deferred tax asset amount includes credit carryforwards of $3 that do not expire and loss and credit carryforwards of $6 that expire in varying amounts from 2023 to 2040.

Reconciliation of ending and beginning unrecognized tax benefits

A reconciliation of the beginning and ending unrecognized tax benefits follows:



	2018			2019			2020
Unrecognized tax benefits at beginning of year	$	9		$	11		$	11
Additions for tax positions provided in prior periods	5			1			2
Additions for tax positions provided in current period	1			1			—
Decreases for tax positions provided in prior years	(4		)	(2		)	(1		)
Settlements of tax positions in the current period	—			—			(1		)
Unrecognized tax benefits at end of year	$	11		$	11		$	11