Income Taxes (Tables)

12 Months Ended

Aug. 25, 2018

Components of Income from Continuing Operations

The components of income from continuing operations before income taxes are as follows:


	Year Ended
(in thousands)	August 25, 2018		August 26, 2017		August 27, 2016
Domestic	$	1,412,963	$	1,737,401	$	1,737,727
International		223,366		188,088		174,987

	$	1,636,329	$	1,925,489	$	1,912,714

Provision for Income Tax Expense

The provision for income tax expense consisted of the following:


	Year Ended
(in thousands)	August 25, 2018			August 26, 2017			August 27, 2016
Current:
Federal	$	328,963		$	487,492		$	534,621
State		36,389			31,733			39,223
International		57,702			50,493			52,844

		423,054			569,718			626,688
Deferred:
Federal		(131,926	)		72,208			48,509
State		8,167			7,769			9,453
International		(502	)		(5,075	)		(12,943	)

		(124,261	)		74,902			45,019

Income tax expense	$	298,793		$	644,620		$	671,707

Reconciliation of Provision for Income Taxes

A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before income taxes is as follows:


	Year Ended
(in thousands)	August 25, 2018			August 26, 2017			August 27, 2016
Federal tax at statutory U.S. income tax rate		25.9	%		35.0	%		35.0	%
State income taxes, net		1.9	%		1.3	%		1.6	%
Transition tax		1.6	%		—			—
Share-based compensation		(1.6	%)		(1.4	%)		—
Impact of tax reform		(9.6	%)		—			—
Other		0.1	%		(1.4	%)		(1.5	%)

Effective tax rate		18.3	%		33.5	%		35.1	%

Significant Components of Company's Deferred Tax Assets and Liabilities

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


(in thousands)	August 25, 2018			August 26, 2017
Deferred tax assets:
Net operating loss and credit carryforwards	$	47,190		$	48,062
Accrued benefits		62,867			96,664
Other		46,375			56,052

Total deferred tax assets		156,432			200,778
Less: Valuation allowances		(19,619	)		(13,501	)

Net deferred tax assets		136,813			187,277
Deferred tax liabilities:
Property and equipment		(101,049	)		(117,580	)
Inventory		(242,138	)		(333,422	)
Prepaid expenses		(42,019	)		(60,920	)
Other		(2,191	)		(11,158	)

Total deferred tax liabilities		(387,397	)		(523,080	)

Net deferred tax liabilities	$	(250,584	)	$	(335,803	)

Reconciliation of Unrecognized Tax Benefits

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


(in thousands)	August 25, 2018			August 26, 2017
Beginning balance	$	22,201		$	27,726
Additions based on tax positions related to the current year		8,184			7,089
Additions for tax positions of prior years		1,404			278
Reductions for tax positions of prior years		(482	)		(6,954	)
Reductions due to settlements		(1,930	)		(1,964	)
Reductions due to statute of limitations		(3,300	)		(3,974	)

Ending balance	$	26,077		$	22,201