Trade Accounts Receivable Sale Programs

12 Months Ended

Aug. 31, 2021

Transfers and Servicing [Abstract]

Trade Accounts Receivable Sale Programs

Trade Accounts Receivable Sale Programs

The Company regularly sells designated pools of high credit quality trade accounts receivable under uncommitted trade accounts receivable sale programs to unaffiliated financial institutions without recourse. As these accounts receivable are sold without recourse, the Company does not retain the associated risks following the transfer of such accounts receivable to the respective financial institutions. The Company continues servicing the receivables sold and in exchange receives a servicing fee under each of the trade accounts receivable sale programs. Servicing fees related to each of the trade accounts receivable sale programs recognized during the fiscal years ended August 31, 2021, 2020 and 2019 were not material. The Company does not record a servicing asset or liability on the Consolidated Balance Sheets as the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

Transfers of the receivables under the trade accounts receivable sale programs are accounted for as sales and, accordingly, net receivables sold under the trade accounts receivable sale programs are excluded from accounts receivable on the Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Consolidated Statements of Cash Flows.

The following is a summary of the trade accounts receivable sale programs with unaffiliated financial institutions where the Company may elect to sell receivables and the unaffiliated financial institution may elect to purchase, at a discount, on an

ongoing basis:

Program	Maximum Amount (in millions)(1)			Type of Facility	Expiration Date
A	$	600		Uncommitted	December 5, 2021	(2)
B	$	150		Uncommitted	November 30, 2021
C	400		CNY	Uncommitted	August 31, 2023
D	$	150		Uncommitted	May 4, 2023	(3)
E	$	150		Uncommitted	January 25, 2022	(4)
F	$	50		Uncommitted	February 23, 2023	(5)
G	$	100		Uncommitted	August 10, 2022	(6)
H	$	100		Uncommitted	July 21, 2022	(7)
I	$	550		Uncommitted	December 4, 2021	(8)
J	$	135		Uncommitted	April 11, 2022	(9)
K	100		CHF	Uncommitted	December 5, 2021	(2)
L	$	90		Uncommitted	January 23, 2022

(1)Maximum amount of trade accounts receivable that may be sold under a facility at any one time.

(2)The program will be automatically extended through December 5, 2025 unless either party provides 30 days notice of termination.

(3)Any party may elect to terminate the agreement upon 30 days prior notice.

(4)The program will be automatically extended through January 25, 2023 unless either party provides 30 days notice of termination.

(5)Any party may elect to terminate the agreement upon 15 days prior notice.

(6)The program will be automatically extended through August 10, 2023 unless either party provides 30 days notice of termination.

(7)The program will be automatically extended through August 21, 2023 unless either party provides 30 days notice of termination.

(8)The program will be automatically extended through December 5, 2024 unless either party provides 30 days notice of termination.

(9)The program will be automatically extended through April 11, 2025 unless either party provides 30 days notice of termination.

In connection with the trade accounts receivable sale programs, the Company recognized the following (in millions):

	Fiscal Year Ended August 31,
	2021		2020		2019
Trade accounts receivable sold	$	4,654	$	8,457	$	6,751
Cash proceeds received	$	4,651	$	8,440	$	6,723
Pre-tax losses on sale of receivables(1)	$	3	$	17	$	28

(1)Recorded to other expense within the Consolidated Statements of Operations.

Asset-Backed Securitization Programs

Global asset-backed securitization program - Effective August 20, 2021, the global securitization program (formerly referred to as the North American asset-backed securitization program) terms were amended to: (i) add a foreign entity to the program, (ii) increase the maximum amount of net cash proceeds available at any one time from $390 million to $600 million and (iii) extend the expiration date of the program to November 25, 2024. As of August 31, 2021, the Company had up to $24 million in available liquidity under its global asset-backed securitization program.

Certain entities participating in the global asset-backed securitization program continuously sell designated pools of trade accounts receivable to a special purpose entity, which in turn sells certain of the receivables at a discount to conduits administered by an unaffiliated financial institution on a monthly basis. In addition, the foreign entity participating in the global asset-backed securitization program sells certain receivables at a discount to conduits administered by an unaffiliated financial institution on a daily basis.

The special purpose entity in the global asset-backed securitization program is a wholly-owned subsidiary of the Company and is included in the Company’s Consolidated Financial Statements. Certain unsold receivables covering up to the maximum amount of net cash proceeds available under the domestic, or U.S., portion of the global asset-backed securitization program are pledged as collateral to the unaffiliated financial institution as of August 31, 2021.

Foreign asset-backed securitization program - The Company terminated the foreign asset-backed securitization program on June 28, 2021. In connection with the termination, the Company paid approximately $167 million in cash, which consisted of: (i) $68 million for the remittance of collections received prior to June 28, 2021, in the Company’s role as servicer of sold receivables and (ii) a repurchase of $99 million of all previously sold receivables, at fair value, that remained outstanding as of June 28, 2021. As of August 31, 2021, the Company has substantially collected the repurchased receivables from customers.

The special purpose entity in the foreign asset-backed securitization program is a separate bankruptcy-remote entity that is winding down as a result of the termination of the foreign-asset backed securitization program. The Company is deemed the primary beneficiary of this special purpose entity as the Company has both the power to direct the activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive the benefits that could potentially be significant to the entity from the transfer of the trade accounts receivable into the special purpose entity. Accordingly, the special purpose entity associated with the foreign asset-backed securitization program is included in the Company’s Consolidated Financial Statements.

The foreign asset-backed securitization program contained a guarantee of payment by the special purpose entity, in an amount approximately equal to the net cash proceeds under the program. As a result of the termination of the foreign asset-backed securitization program all outstanding amounts have been settled with the financial institution as of August 31, 2021. As such, no liability has been recorded for obligations under the guarantee.

Global and foreign asset-backed securitization programs- The Company continues servicing the receivables sold and in exchange receives a servicing fee under the global asset-backed securitization programs. Servicing fees related to each of the asset-backed securitization programs recognized during the fiscal years ended August 31, 2021, 2020 and 2019 were not material. The Company does not record a servicing asset or liability on the Consolidated Balance Sheets as the Company estimates that the fee it receives to service these receivables approximates the fair market compensation to provide the servicing activities.

Transfers of the receivables under the asset-backed securitization programs are accounted for as sales and, accordingly, net receivables sold under the asset-backed securitization programs are excluded from accounts receivable on the Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Consolidated Statements of Cash Flows.

In connection with the asset-backed securitization programs, the Company recognized the following (in millions):

	Fiscal Year Ended August 31,
	2021(3)		2020		2019(4)
Trade accounts receivable sold	$	4,222	$	4,333	$	4,057
Cash proceeds received(1)	$	4,202	$	4,314	$	4,031
Proceeds due from bank	$	10	$	—	$	—
Pre-tax losses on sale of receivables(2)	$	10	$	19	$	26

(1)The amounts primarily represent proceeds from collections reinvested in revolving-period transfers.

(2)Recorded to other expense within the Consolidated Statements of Operations.

(3)Includes trade accounts receivable sold and cash proceeds received under the foreign asset-backed securitization program through June 28, 2021, except for $99 million of previously sold receivables that were repurchased.

(4)Excludes $650 million of trade accounts receivable sold, $488 million of cash and $14 million of net cash received prior to the amendment of the foreign asset-backed securitization program and under the global asset-backed securitization program which occurred during the first quarter of fiscal year 2019.

The global asset-backed securitization program requires compliance with several covenants including compliance with the interest ratio and debt to EBITDA ratio of the Credit Facility. As of August 31, 2021 and 2020, the Company was in compliance with all covenants under the global asset-backed securitization program. As of August 31, 2020, the Company was in compliance with all covenants under the foreign asset-backed securitization program.