Income Taxes (Tables)

12 Months Ended

Aug. 29, 2020

Income Taxes

Components of Income from Continuing Operations

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

		Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018
Domestic	$	1,960,320	$	1,745,625	$	1,412,963
International		256,194		285,708		223,366
	$	2,216,514	$	2,031,333	$	1,636,329

Provision for Income Tax Expense

The provision for income tax expense consisted of the following:

	Year Ended
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018
Current:
Federal	$	324,156	$	274,504	$	328,963
State		47,880		45,457		36,389
International		60,429		59,100		57,702
		432,465		379,061		423,054
Deferred:
Federal		43,706		25,757		(131,926)
State		12,544		6,914		8,167
International		(5,173)		2,380		(502)
		51,077		35,051		(124,261)
Income tax expense	$	483,542	$	414,112	$	298,793

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
	August 29,		August 31,		August 25,
(in thousands)	2020		2019		2018
Federal tax at statutory U.S. income tax rate	21.0	%	21.0	%	25.9	%
State income taxes, net	2.2	%	2.0	%	1.9	%
Transition tax	—		—		1.6	%
Share-based compensation	(0.7)	%	(1.8)	%	(1.6)	%
Impact of tax reform	—		(0.4)	%	(9.6)	%
Global intangible lower-taxed income (“GILTI”)	1.0	%	1.3	%	—
Foreign Tax Credits	(1.1)	%	(1.1)	%	—
Other	(0.6)	%	(0.6)	%	0.1	%
Effective tax rate	21.8	%	20.4	%	18.3	%

Significant Components of Company's Deferred Tax Assets and Liabilities

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

	August 29,		August 31,
(in thousands)	2020		2019
Deferred tax assets:
Net operating loss and credit carryforwards	$	41,437	$	42,958
Accrued benefits		88,226		58,900
Operating lease liabilities		617,002		—
Other		69,788		59,237
Total deferred tax assets		816,453		161,095
Less: Valuation allowances		(28,373)		(23,923)
Net deferred tax assets		788,080		137,172
Deferred tax liabilities:
Property and equipment		(173,696)		(114,956)
Inventory		(298,585)		(259,827)
Prepaid expenses		(55,827)		(46,487)
Operating lease assets		(581,381)		—
Other		(4,934)		(1,021)
Total deferred tax liabilities		(1,114,423)		(422,291)
Net deferred tax liabilities	$	(326,343)	$	(285,119)

Reconciliation of Unrecognized Tax Benefits

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

	August 29,		August 31,
(in thousands)	2020		2019
Beginning balance	$	30,892	$	26,077
Additions based on tax positions related to the current year		8,512		8,621
Additions for tax positions of prior years		946		2,115
Reductions for tax positions of prior years		(4,124)		(1,219)
Reductions due to settlements		—		(1,918)
Reductions due to statute of limitations		(4,284)		(2,784)
Ending balance	$	31,942	$	30,892