Income tax (Tables)

12 Months Ended

Jul. 31, 2024

Income Tax Disclosure [Abstract]

Schedule of Income Tax by Geographical Area

Income before income tax by geographical area consisted of the following:

	For the years ended July 31,
(In millions)	2024	2023	2022
United Kingdom	$80	$80	$102
United States	2,022	2,011	2,222
International	362	373	384
Total	$2,464	$2,464	$2,708

Schedule of Provision for Income Tax

Provision for income taxes consisted of the following:

	For the years ended July 31,
(In millions)	2024	2023	2022
Current:
United Kingdom	$3	$—	($18)
Federal and state (U.S.)	552	624	528
International	49	55	58
Total current	$604	$679	$568
Deferred:
United Kingdom	$155	$17	$20
Federal and state (U.S.)	(32)	(120)	20
International	2	(1)	1
Total deferred	$125	($104)	$41
Provision for income taxes	$729	$575	$609

Schedule of Reconciliation of Income Tax Expense

The following is a reconciliation of income tax expense with income taxes at the U.K. statutory rate:

	For the years ended July 31,
(In millions)	2024			2023			2022
Provision for income taxes at U.K. statutory rate(1)	$616	25.0	%	$518	21.0	%	$515	19.0	%
Non-U.K. tax rate differentials	(30)	(1.2)		68	2.8		127	4.7
Impact of change in reserves	12	0.5		8	0.3		8	0.2
Tax credits	(8)	(0.3)		(15)	(0.6)		(9)	(0.3)
Impact of Merger transaction (2)	144	5.8		—	—		—	—
Non-taxable income	(13)	(0.5)		(6)	(0.2)		(9)	(0.3)
Other	8	0.3		2	—		(23)	(0.8)
Income tax expense	$729	29.6	%	$575	23.3	%	$609	22.5	%

(1)For each fiscal year presented, the Company was tax resident in the U.K. Therefore, the Company has utilized the U.K. statutory rate. Since the change in statutory rate transitioned between fiscal years, the Company utilized a prorated statutory rate during fiscal 2023.

(2)As a result of the steps taken in the fourth quarter of fiscal 2024 to complete the Merger, the Company recognized one-time, non-cash deferred tax charges of $137 million composed of a reduction in deferred tax assets of $90 million related to tax losses that were no longer expected to be realizable and an increase in valuation allowance of $47 million related to UK deferred tax assets no longer expected to be realizable, as well the tax impact of non-deductible expenses related to the Merger.

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	As of July 31,
(In millions)	2024	2023
Assets:
Deferred compensation	$82	$69
Tax loss carryforwards	90	186
Lease liabilities	404	378
Sales returns and other liabilities	106	123
Inventory	45	46
Capitalized research and development	82	44
Other	49	48
Total deferred tax assets	858	894
Valuation allowance	(128)	(81)
Total deferred tax assets, net of valuation allowance	$730	$813
Liabilities:
Right of use assets	($397)	($374)
Goodwill and intangible assets	(129)	(118)
Property, plant and equipment	(34)	(21)
Total deferred tax liabilities	(560)	(513)
Net deferred tax assets	$170	$300

Schedule of Unrecognized Tax Benefits Roll Forward

The following table reconciles the beginning and ending amount of our gross unrecognized tax benefits:

	For the years ended July 31,
(In millions)	2024	2023	2022
Unrecognized tax benefits at beginning of fiscal year	$144	$140	$132
Additions based on tax positions related to current year	25	27	27
Additions for tax positions of prior years	2	2	11
Reductions for tax positions of prior years	(10)	—	—
Reductions due to lapse of statute of limitations	(10)	(25)	(30)
Unrecognized tax benefits	$151	$144	$140