Income taxes (Tables)

12 Months Ended

Aug. 31, 2022

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):

	2022		2021		2020
U.S.	$	2,998	$	61	$	759
Non–U.S.	987		1,934		(313)
Total	$	3,985	$	1,995	$	446

Provisions for income taxes

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

	2022		2021		2020
Current provision
Federal	$	39	$	79	$	184
State	37		115		49
Non–U.S.	260		234		135
	$	336	$	428	$	368
Deferred provision
Federal	$	(78)	$	(10)	$	(83)
State	(20)		(46)		2
Non–U.S. – tax law change	—		344		139
Non–U.S. – excluding tax law change	(268)		(49)		(87)
	(366)		239		(29)
Income tax (benefit) provision	$	(30)	$	667	$	339

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:

	2022		2021		2020
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	0.4		3.5		8.8
Foreign income taxed at non-U.S. rates	(3.0)		(4.4)		(17.0)
Non-taxable income	(2.7)		(5.0)		(47.5)
Non-deductible expenses	3.0		0.3		9.0
Tax law changes	—		17.3		31.3
Change in valuation allowance 1	(9.0)		(4.7)		4.1
Tax benefits from restructuring	—		(4.2)		—
Tax expense on non-operating equity earnings	—		6.1		—
Uncertain tax positions	1.3		6.2		7.5
Non-controlling interest	1.2		—		—
Goodwill impairment	—		—		72.5
Tax credits	(1.0)		(1.8)		(10.3)
Conversion of equity investment	(11.8)		—		—
Other	(0.2)		(0.9)		(3.4)
Effective income tax rate	(0.8)	%	33.4	%	76.0	%

1Net of changes in related tax attributes and tax benefits from capital losses generated and utilized in fiscal 2021.

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):

	August 31, 2022		August 31, 2021
Deferred tax assets:
Compensation and benefits	$	171	$	175
Insurance	108		103
Accrued rent & lease obligations	5,296		5,372
Allowance for doubtful accounts	53		34
Tax attributes	7,825		7,467
Stock compensation	56		88
Deferred income	120		34
Other 1	230		189
	$	13,859	$	13,462
Less: valuation allowance	7,521		7,239
Total deferred tax assets	$	6,338	$	6,223
Deferred tax liabilities:
Accelerated depreciation	$	634	$	896
Inventory	441		377
Intangible assets	1,134		1,465
Equity method investment	314		236
Lease right-of-use asset	4,763		4,792
Other 1	355		219
Total deferred tax liabilities	7,641		7,985
Net deferred tax liabilities	$	1,303	$	1,762

1Includes certain reclassifications to conform to current period presentation.

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):

	2022		2021		2020
Balance at beginning of year	$	1,098	$	494	$	455
Gross increases related to tax positions in a prior period	63		229		60
Gross decreases related to tax positions in a prior period	(51)		(52)		(23)
Gross increases related to tax positions in the current period	21		446		9
Settlements with taxing authorities	(19)		(13)		(4)
Lapse of statute of limitations	(2)		(6)		(3)
Balance at end of year	$	1,110	$	1,098	$	494