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Income Taxes (Tables)

12 Months Ended

Aug. 31, 2022

Income Tax Disclosure [Abstract]

Income (Loss) Before Income Tax Expense

Income (loss) before income tax expense is summarized below (in millions):

			Fiscal Year Ended August 31,
			2022						2021						2020
Domestic(1)			$	(116)					$	(271)					$	(452)
Foreign(1)			1,347						1,215						713
Total			$	1,231					$	944					$	261

(1)Includes the elimination of intercompany foreign dividends paid to the U.S.

Income Tax Expense (Benefit)

Income tax expense (benefit) is summarized below (in millions):

			Fiscal Year Ended August 31,
			2022						2021						2020
Current:
Domestic - federal			$	7					$	7					$	(3)
Domestic - state			2						3						1
Foreign			239						252						180
Total current			248						262						178
Deferred:
Domestic - federal			(25)						2						(10)
Foreign			12						(18)						36
Total deferred			(13)						(16)						26
Total income tax expense			$	235					$	246					$	204

Reconciliations of Income Tax Expense at U.S. Federal Statutory Income Tax Rate Compared to Actual Income Tax Expense

Reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is summarized below:

			Fiscal Year Ended August 31,
			2022						2021						2020
U.S. federal statutory income tax rate			21.0		%				21.0		%				21.0		%
State income taxes, net of federal tax benefit			0.7						0.2						(2.6)
Impact of foreign tax rates(1)(2)			(4.0)						(4.6)						(0.9)
Permanent differences			1.2						(0.4)						3.2
Income tax credits(1)			(0.5)						(0.4)						(2.5)
Changes in tax rates on deferred tax assets and liabilities(3)			—						—						10.3
Valuation allowance(4)			(3.3)						1.3						16.8
Equity compensation			(0.5)						0.6						2.2
Impact of intercompany charges and dividends			3.6						4.4						15.0
Global Intangible Low-Taxed Income			1.1						3.0						13.7
Other, net			(0.2)						0.9						2.0
Effective income tax rate			19.1		%				26.0		%				78.2		%

(1)The Company has been granted tax incentives for various subsidiaries in China, Malaysia, Singapore and Vietnam, which primarily expire at various dates through fiscal year 2031 and are subject to certain conditions with which the Company expects to comply. These tax incentives resulted in a tax benefit of approximately $80 million ($0.57 per basic weighted average shares outstanding), $51 million ($0.34 per basic weighted average shares outstanding) and $43 million ($0.28 per basic weighted average shares outstanding) during the fiscal years ended August 31, 2022, 2021 and 2020, respectively.

(2)For the fiscal years ended August 31, 2022 and August 31, 2021, the impact of foreign tax rates was primarily related to increased income in low tax rate jurisdictions.

(3)For the fiscal year ended August 31, 2020, the changes in tax rates on deferred tax assets and liabilities was primarily due to the re-measurement of deferred tax assets related to an extension of a non-U.S. tax incentive of $21 million.

(4)For the fiscal year ended August 31, 2022, the valuation allowance change was primarily due to an income tax benefit of $26 million for the reversal of a portion of the U.S. valuation allowance and decreased deferred tax assets with corresponding valuation allowances due to the liquidation of certain non-U.S. subsidiaries. The valuation allowance change for the fiscal years ended August 31, 2021 and 2020 was primarily due to the change in deferred tax assets for sites with existing valuation allowances.

Deferred Tax Assets and Liabilities

Significant components of the deferred tax assets and liabilities are summarized below (in millions):

			August 31, 2022						August 31, 2021
Deferred tax assets:
Net operating loss carryforwards			$	176					$	200
Receivables			4						8
Inventories			16						14
Compensated absences			13						13
Accrued expenses			106						115
Property, plant and equipment			66						71
Domestic tax credits			11						11
Foreign jurisdiction tax credits			4						10
Equity compensation			10						10
Domestic interest carryforwards			4						4
Cash flow hedges			—						10
Capital loss carryforwards			20						20
Revenue recognition			32						36
Operating and finance lease liabilities			72						60
Other			27						19
Total deferred tax assets before valuation allowances			561						601
Less valuation allowances			(281)						(353)
Net deferred tax assets			$	280					$	248
Deferred tax liabilities:
Unremitted earnings of foreign subsidiaries			$	57					$	60
Intangible assets			25						27
Operating lease assets			111						92
Other			10						4
Total deferred tax liabilities			$	203					$	183
Net deferred tax assets			$	77					$	65

Summary of Tax Credit Carryforwards

The amount and expiration dates of income tax net operating loss carryforwards, tax credit carryforwards, and tax capital loss carryforwards, which are available to reduce future taxes, if any, as of August 31, 2022 are as follows (in millions):

			Last Fiscal Year of Expiration						Amount
Income tax net operating loss carryforwards:(1)
Domestic - federal			2038 or indefinite						$	13
Domestic - state			2042 or indefinite						$	54
Foreign			2037 or indefinite						$	567
Tax credit carryforwards:(1)
Domestic - federal			2032						$	7
Domestic - state			2027 or indefinite						$	4
Foreign(2)			Indefinite						$	4
Tax capital loss carryforwards:(3)
Domestic - federal			2026						$	76

(1)Net of unrecognized tax benefits.

(2)Calculated based on the deferral method and includes foreign investment tax credits.

(3)The tax capital loss carryforwards were primarily from an impairment of an investment that was deemed worthless for tax purposes.

Summary of Operating Loss Carryforwards

The amount and expiration dates of income tax net operating loss carryforwards, tax credit carryforwards, and tax capital loss carryforwards, which are available to reduce future taxes, if any, as of August 31, 2022 are as follows (in millions):

			Last Fiscal Year of Expiration						Amount
Income tax net operating loss carryforwards:(1)
Domestic - federal			2038 or indefinite						$	13
Domestic - state			2042 or indefinite						$	54
Foreign			2037 or indefinite						$	567
Tax credit carryforwards:(1)
Domestic - federal			2032						$	7
Domestic - state			2027 or indefinite						$	4
Foreign(2)			Indefinite						$	4
Tax capital loss carryforwards:(3)
Domestic - federal			2026						$	76

(1)Net of unrecognized tax benefits.

(2)Calculated based on the deferral method and includes foreign investment tax credits.

(3)The tax capital loss carryforwards were primarily from an impairment of an investment that was deemed worthless for tax purposes.

Reconciliations of Unrecognized Tax Benefits

Reconciliation of the unrecognized tax benefits is summarized below (in millions):

			Fiscal Year Ended August 31,
			2022						2021						2020
Beginning balance			$	241					$	190					$	164
Additions for tax positions of prior years			22						15						10
Reductions for tax positions of prior years			(21)						(3)						(9)
Additions for tax positions related to current year(1)			36						36						27
Cash settlements			(3)						—						(1)
Reductions from lapses in statutes of limitations			(3)						(2)						(1)
Reductions from non-cash settlements with taxing authorities			(9)						—						(2)
Foreign exchange rate adjustment			(10)						5						2
Ending balance			$	253					$	241					$	190
Unrecognized tax benefits that would affect the effective tax rate (if recognized)			$	150					$	139					$	109

(1)The additions for the fiscal years ended August 31, 2022, 2021 and 2020 are primarily related to taxation of certain intercompany transactions.

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