Income taxes (Tables)

12 Months Ended

Aug. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of income before income tax, domestic and foreign

The components of (Loss) earnings before income tax (benefit) provision were (in millions):

	2023		2022		2021
U.S.	$	(7,553)	$	2,998	$	61
Non–U.S.	2,134		987		1,934
Total	$	(5,419)	$	3,985	$	1,995

Provisions for income taxes

The Income tax (benefit) provision consists of the following (in millions):

	2023		2022		2021
Current provision
Federal	$	242	$	39	$	79
State	(13)		37		115
Non–U.S.	283		260		234
	$	512	$	336	$	428
Deferred provision
Federal	$	(1,886)	$	(78)	$	(10)
State	(364)		(20)		(46)
Non–U.S. – tax law change	—		—		344
Non–U.S. – excluding tax law change	(120)		(268)		(49)
	(2,370)		(366)		239
Income tax (benefit) provision	$	(1,858)	$	(30)	$	667

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 is as follows:

	2023		2022		2021
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	5.8		0.4		3.5
Foreign income taxed at non-U.S. rates	(3.0)		(3.0)		(4.4)
Non-taxable income	2.5		(2.7)		(5.0)
Non-deductible expenses	(4.9)		3.0		0.3
Tax law changes	—		—		17.3
Change in valuation allowance 1	6.0		(9.0)		(4.7)
Tax benefits from restructuring	1.1		—		(4.2)
Tax expense on non-operating equity earnings	—		—		6.1
Uncertain tax positions	(0.5)		1.3		6.2
Non-controlling interest	(2.9)		1.2		—
Tax credits	2.8		(1.0)		(1.8)
Conversion of equity investment	—		(11.8)		—
Change in outside basis difference	1.9		—		—
Change in measurement of prior year tax positions	3.5		—		—
Other	1.0		(0.2)		(0.9)
Effective income tax rate 2	34.3	%	(0.8)	%	33.4	%

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

2Effective tax rate for fiscal 2023 represents a tax benefit on a pre-tax loss.

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, 2023		August 31, 2022
Deferred tax assets:
Compensation and benefits	$	98	$	171
Insurance	131		108
Accrued rent & lease obligations	5,265		5,296
Legal liability 1	1,551		174
Allowance for doubtful accounts	23		53
Tax attributes	7,784		7,825
Stock compensation	74		56
Deferred income	8		120
Equity method investment	76		—
Other 1	143		56
Total deferred tax assets	$	15,153	$	13,859
Less: valuation allowance	7,360		7,521
Total deferred tax assets, net	$	7,793	$	6,338
Deferred tax liabilities:
Accelerated depreciation	$	254	$	634
Inventory	403		441
Intangible assets	1,024		1,134
Equity method investment	—		314
Lease right-of-use asset	4,690		4,763
Outside basis difference 1	1,045		52
Other 1	180		303
Total deferred tax liabilities	7,596		7,641
Net deferred tax assets (liabilities)	$	197	$	(1,303)

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):

	2023		2022		2021
Balance at beginning of year	$	1,110	$	1,098	$	494
Gross increases related to tax positions in a prior period	12		63		229
Gross decreases related to tax positions in a prior period	(19)		(51)		(52)
Gross increases related to tax positions in the current period	12		21		446
Settlements with taxing authorities	(7)		(19)		(13)
Lapse of statute of limitations	(2)		(2)		(6)
Balance at end of year	$	1,106	$	1,110	$	1,098