Income taxes (Tables)

12 Months Ended

Aug. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of income before income tax, domestic and foreign

The components of earnings from continuing operations before income tax provision were (in millions):

	2021		2020		2019
U.S.	$	61	$	759	$	1,898
Non–U.S.	1,934		(313)		2,461
Total	$	1,995	$	446	$	4,359

Provisions for income taxes

The provision for income taxes from continuing operations consists of the following (in millions):

	2021		2020		2019
Current provision
Federal	$	79	$	184	$	228
State	115		49		46
Non–U.S.	234		135		183
	$	428	$	368	$	457
Deferred provision
Federal	$	(10)	$	(83)	$	151
State	(46)		2		4
Non–U.S. – tax law change	344		139		—
Non–U.S. – excluding tax law change	(49)		(87)		(35)
	239		(29)		120
Income tax provision	$	667	$	339	$	577

Difference between the statutory federal income tax rate and the effective tax rate

The difference between the statutory federal income tax rate and the effective tax rate from continuing operations is as follows:

	2021		2020		2019
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	3.5		8.8		0.9
Foreign income taxed at non-U.S. rates	(4.4)		(17.0)		(1.9)
Non-taxable income	(5.0)		(47.5)		(3.6)
Non-deductible expenses	0.3		9.0		0.2
Tax law changes	17.3		31.3		(0.4)
Change in valuation allowance 1	(4.7)		4.1		2.1
Tax benefits from restructuring	(4.2)		—		—
Tax expense on non-operating equity earnings	6.1		—		—
Uncertain tax positions	6.2		7.5		(0.8)
Goodwill impairment	—		72.5		—
Tax credits	(1.8)		(10.3)		(4.4)
Other	(0.9)		(3.4)		0.1
Effective income tax rate	33.4	%	76.0	%	13.2	%

1Net of changes in related tax attributes and tax benefits from capital losses generated and utilized in FY21.

Deferred tax assets and liabilities included in the consolidated balance sheet

The deferred tax assets and liabilities included in the Consolidated Balance Sheets consist of the following (in millions):

	2021		2020
Deferred tax assets:
Compensation and benefits	$	175	$	176
Postretirement benefits	—		88
Insurance	103		98
Accrued rent & lease obligations	5,372		5,187
Allowance for doubtful accounts	34		9
Tax attributes	7,467		6,781
Stock compensation	88		47
Deferred income	34		18
Other	—		50
	$	13,273	$	12,454
Less: valuation allowance	7,239		6,490
Total deferred tax assets	$	6,034	$	5,964
Deferred tax liabilities:
Accelerated depreciation	$	896	$	683
Inventory	377		345
Intangible assets	1,465		1,130
Equity method investment	236		542
Lease right-of-use asset	4,792		4,589
Other	30		—
Total deferred tax liabilities	7,796		7,289
Net deferred tax liabilities	$	1,762	$	1,325

Reconciliation of the total amounts of unrecognized tax benefits

The following table provides a reconciliation of the total amounts of unrecognized tax benefits (in millions):

	2021		2020		2019
Balance at beginning of year	$	494	$	455	$	456
Gross increases related to tax positions in a prior period	229		60		33
Gross decreases related to tax positions in a prior period	(52)		(23)		(53)
Gross increases related to tax positions in the current period	446		9		26
Settlements with taxing authorities	(13)		(4)		(2)
Lapse of statute of limitations	(6)		(3)		(5)
Balance at end of year	$	1,098	$	494	$	455