Trade Accounts Receivable Sale Programs

12 Months Ended

Aug. 31, 2023

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, 2023, 2022 and 2021 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 (in millions):

Program	Maximum Amount(1)			Type of Facility	Expiration Date
A	$	700		Uncommitted	December 5, 2025(2)
B	$	120		Uncommitted	(2)
C	400		CNY	Uncommitted	August 31, 2023(2)
D	$	150		Uncommitted	May 4, 2028(2)
E	$	150		Uncommitted	(3)
F	$	50		Uncommitted	(3)
G	$	100		Uncommitted	(2)
H	$	600		Uncommitted	December 5, 2024(2)
I	$	135		Uncommitted	April 11, 2025(2)
J	100		CHF	Uncommitted	December 5, 2025(2)
K	8,100		INR	Uncommitted	(2)

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

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

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

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

	Fiscal Year Ended August 31,
	2023		2022		2021
Trade accounts receivable sold	$	10,784	$	8,513	$	4,654
Cash proceeds received	$	10,748	$	8,504	$	4,651
Pre-tax losses on sale of receivables(1)	$	36	$	9	$	3

(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. The facility limit was increased to $700 million for the month of August 2023. As of August 31, 2023, the Company had no 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, 2023.

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 had substantially collected the repurchased receivables from customers.

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, 2023, 2022 and 2021 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,
	2023		2022		2021(3)
Trade accounts receivable sold	$	4,101	$	3,932	$	4,222
Cash proceeds received(1)	$	4,061	$	3,919	$	4,202
Proceeds due from bank	$	—	$	—	$	10
Pre-tax losses on sale of receivables(2)	$	40	$	13	$	10

(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.

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, 2023 and 2022, the Company was in compliance with all covenants under the global asset-backed securitization program. As of August 31, 2021, the Company was in compliance with all covenants under the global and foreign asset-backed securitization programs.